Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Average Stakeholder CTF Just £1 higher Than Cash Alternative

Personal_Finance / CTF May 12, 2010 - 05:54 AM GMT

By: MoneyFacts

Personal_Finance

Best Financial Markets Analysis ArticleThe latest survey by Investment Life & Pensions Moneyfacts has revealed how the value of the average stakeholder Child Trust Fund (CTF) has edged back past those of cash CTFs over the five years since the scheme was launched.


The survey examined the performance of cash and stakeholder CTFs in each tax year since their launch in April 2005 (see table below). It found that after enjoying strong investment returns over the last tax year, the average stakeholder CTF is now worth £1 more than the average cash CTF.

Table 1: Stakeholder Child Trust Fund versus Cash Child Trust Fund Performance by Tax Year

Notes: Table shows fund performance for every tax year since the Child Trust Fund was launched in April 2005 and four year cumulative performance.

Surging stakeholder
As the table highlights, the fortunes of CTF stakeholder accounts have varied considerably over the years. Healthy average growth of 24.2% in the first tax year was followed by the more circumspect rise of 7.3% in the subsequent 12 month period. Two years of negative returns then followed as the markets faltered, with a voucher invested at the beginning of the 2007/08 tax year losing 6.4% of its value over the following year, and a disappointing drop of 26.6% being recorded during 2008/09.

However, things certainly got back on track last year, during which the average CTF fund enjoyed growth of 40.1%, meaning the initial £250 investment would have gained in excess of £100. Anyone who placed their child’s voucher into a CTF on the day the initiative was launched will currently be looking at an average fund size of £319.78, growth of 27.9%.

In terms of individual stakeholder funds, the top performer of the 2009/10 tax year, the F&C FTSE All-Share Tracker, enjoyed growth of 46.4%, closely followed by Legal & General’s UK Index Trust (46.1%). Leading the way over the lifetime of the CTF is the Baillie Gifford Managed fund, which has delivered a return of 46.1%, turning £250 into more than £365.

Conservative cash
Given that interest rates have remained pegged at historic lows since March last year, it is unsurprising that cash CTFs have had a relatively disappointing 12 months in comparison to their stakeholder CTF counterparts. During the 2009/10 tax year, the average cash CTF will have turned an initial £250 into just £255.82.

While the average cash CTF will have given rise to interest totalling £68.50 over the past five years, the average stakeholder CTF has now delivered a return of £69.78. It is a significant turn around in fortunes on a year earlier, when the average cash return of £60.70 was preferable to the £17.61 loss delivered by stakeholder CTFs.

Richard Eagling, Editor of Investment Life & Pensions Moneyfacts: said:

“The paucity of interest rates, in tandem with the stock market recovery, means that stakeholder CTFs are now neck and neck with their cash rivals in terms of the returns each have delivered since the initiative was introduced.

“Given that funds in a CTF have to remain untouched for 18 years, it makes sense for new parents to consider the merits of investing in stocks and shares, either via a stakeholder or non-stakeholder CTF.

“However, in light of the coalition deal between the Conservatives and the Liberal Democrats it remains a distinct possibility that the CTF might not be around, in its present form at least, to see its sixth birthday.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules