For immediate release: Monday 2 November 1998

EQUITIES WELL AHEAD OVER THE LONG RUN IN SPITE OF SEPTEMBER'S MARKET FALLS

• Over 10 yrs to 1.10.98, the annual income on £1,000 invested in a Corporate Bond fund averaged a high £57. The income from an average UK Equity Income unit trust rose to £65 after 10 yrs; while the savings income on an average deposit dropped to £33 in the 10th year from £81 in 1989.
  
  
• The capital invested in October 1988 in an average Corporate Bond fund grew 22% over 10 yrs compared to 79% in an average UK Equity Income fund.
  
  
• In total return, £1,000 over 10 yrs to 1.10.98 in an average savings account added just £636 to its value; the investment in an average Corporate Bond fund more than doubled to £2,138. However, including September’s recent market falls, the equity fund grew 168% to £2,680 (or £3,016 in a PEP). Over 15 yrs, the £1,000 would have grown to £8,322 and £15,708 over 20 yrs, £12,056 more than in the savings account.
  
  
• Over this 10-yr period to 1.10.98, UK Equity Income funds on average achieved a 4% higher total return than UK Growth funds (£2,575 on £1,000 compared to £2,680) and 7% higher than International Growth funds (£2,509 against £2,680).
  
  
• On regular savings of £50 a month, the equity investment in a UK Growth fund outstripped the savings account deposit after 5yrs by £531. The difference increased to £2,994 over 10 yrs, and £9,449 over 15 yrs.
  
  
• A £1,000 investment in a UK Equity and Bond fund overtook an equivalent managed life fund investment after 5 yrs by 8%, and ended 27% ahead of an average building society deposit. The difference on a £50 regular savings plan reduced to 6% on the life fund, and 11% on the deposit account. By 15 yrs, the lump sum investment ran 167% ahead of the deposit, and 68% ahead of the managed life fund; while the regular savings unit trust plan ended 70% higher than the deposit, and 32% higher than the managed life fund.
  
  
• After 10 yrs, £1,000 in an average UK Equity and Bond Income fund beat the Retail Price Index by 83% (or 91% in a PEP); the deposit was only 8% ahead of the index.

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For further comment please contact:

Anne McMeehan Director of Communications AUTIF 0171 831 0898
Michael Quach Head of Statistics AUTIF 0171 831 0898