Chelsea is in her mid-20s and started investing during the pandemic. She is currently studying a PhD in quantum physics at the University of Exeter and previously spent two years working as a quantitative analyst.

Her investment journey began in February 2021 when she wanted to invest a lump sum. She opened a stocks and shares ISA and has never looked back.

‘At that time interest rates were poor on savings accounts. I heard quite a few people had got into investing and they were able to make better returns. So, I came across a stocks and savings ISA, and I thought I’d give it a go. I put all my savings in that account, and that is where I deal from now.’

Chelsea says she has always been a saver rather than a spender. This habit was forged despite not being taught about finance or investing at school. ‘I don’t think a lot of young people are aware of financial products like a stocks and shares ISA or the fact that you don’t need a huge amount of money or technical knowledge to invest.’

STAYING INFORMED

The student is aiming to create a diversified portfolio in terms of asset class, geography and investment style, and she sticks to funds and ETFs.

‘I read Shares magazine to get investment ideas. It’s easy to read with lots of beginner articles on investing, as well as giving a general overview of how the financial markets are doing and explaining financial jargon. The magazine highlights different sectors – what’s doing well, what’s not doing well now and what has potential to do well in the future. It is a useful resource. I try to look at things from a long-term perspective.’

Chelsea follows a few people who discuss investing on social media and has found some of their videos to be useful. She plans to find out if her university has an investing club or if there is a society in the local area which she can join.

WHAT IS IN CHELSEA’S PORTFOLIO?

‘What grabbed my attention initially was one of the Vanguard LifeStrategy funds. It was heavily diversified and simple to understand. The Vanguard Life Strategy 80% Equity Fund (B4PQW15) – 80% equity, 20% bonds – was the very first fund I invested in through my ISA.

‘I have exposure to other asset classes such as commodities through WisdomTree Enhanced Commodity UCITS ETF (WCOM). I also have exposure to companies focused on environmental, social and governance factors through Baillie Gifford Positive Change Fund (BYVGKV5).’

To play the theme of property, Chelsea has money in iShares Environment & Low Carbon Tilt Real Estate Index Fund (B5BFJG7). Over the past five years this fund has returned 19.1% according to FE Fundinfo. Its portfolio is made up of stakes in real estate investment trusts which own a variety of properties including ones for retail, residential, office and leisure use.

Finally, Chelsea has money in JPMorgan US Equity Income Fund (B3FJQ59) which invests in large US companies that offer the prospect of a growing stream of dividends. US stocks often trade on higher valuations to UK stocks, yet JPMorgan says its US income fund targets more ‘attractively valued’ companies.

Chelsea says she has exposure to the US, UK and Europe across her portfolio but nothing in emerging markets. The student says this is deliberate. She avoids funds investing in emerging markets like China, India, Russia and Brazil in the belief they have too much market volatility and that there is economic instability involved with investing in those countries.

A ‘QUANTUM LEAP’ FOR INVESTING

When it comes to investing, Chelsea is philosophical in her approach after initially losing some money when she first tried investing. ‘It was an unusual time to begin investing with the pandemic, followed by a spike in interest rates and the Ukraine crisis, so I’m very much looking to investing now with a long-term view in mind.’

There are some aspects of investing that Chelsea still finds scary, such as the amount of choice on offer for an investor. ‘There are so many funds and investment trusts to navigate through, which is particularly challenging, and finding which are best for my personal use, profile and portfolio. Timing the market is also hard.

‘If I had one investment wish, it would be to make things simpler for me, so I could pick which funds and investment trusts to invest in. I find it difficult to differentiate which ones to choose. I spend a lot of time comparing different funds.’

EYE ON THE FUTURE

When Chelsea is not investing in the financial markets, she likes rowing and spending time with her family. ‘My five-year medium-term goal is buying a home, after establishing my career, close to friends and family in the south-west.’

With regards to investing, Chelsea wants to find a way to invest in quantum computing. ‘I read an article in the Financial Times recently about how the UK Government is going to invest in this area and I would like to do the same. I haven’t been put off investing after my shaky start; I’ve learned from my mistakes and I will continue to invest for my future.’

DISCLAIMER: Please note, we do not provide financial advice in case study articles, and we are unable to comment on the suitability of the subject’s investments. Individuals who are unsure about the suitability of investments should consult a suitably qualified financial adviser. Past performance is not a guide to future performance and some investments need to be held for the long term. Tax treatment depends on your individual circumstances and rules may change. ISA and pension rules apply.

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