Information: For immediate release Tuesday 18 May 1999

INVESTORS SAY THEY AIM TO BEAT BANK RATES OR INFLATION

Most investors consider beating inflation or getting a better return than from a deposit account to be a ‘satisfactory return’ for their money, according to research carried out for the Association of Unit Trusts and Investment Funds (AUTIF) last month.

The survey, conducted as part of AUTIF’s monthly FACETS* study, analysed the attitudes of a nationwide sample of adult investors towards stock market investing and found that 72% would be satisfied with either simply beating inflation (24%), or bettering deposit rates (48%). 8% saw matching the total return of the stock market as their objective. The remaining 21% considered "satisfactory" to mean getting the best possible return from specialising in particular sectors or elements of the stock market.

Of those questioned, the most ambitious investors (aiming for the best possible return) included the 45-54 year old male respondents, responses from the North and Scotland, and the C2 social group. Ironically, the women in the survey became most ambitious by the time they were 65 and over, while the men at that age showed the most caution. In terms of social ranking, expectation fell from the most ambitious C2/DE investors to the most cautious AB/C1 investors.

Of all the investors in the survey, PEP and unit trust holders were the least concerned with getting the best possible return on their money by investing in particular sectors of the stock market. 21% of the overall sample considered getting the best from market sectors as a satisfactory return, while only 12% of PEP holders held that view. On the other hand, 18% of PEP holders (compared to 8% overall) said they aimed for a return equal to the stock market as a whole.

Anne McMeehan, AUTIF Director of Communications, said:

"Whilst people in the C2DE socio-economic range are less likely to save, the ABC1’s are still very cautious. Investors are going to have to recognise that 'diversification' and 'time' are perhaps their two greatest allies in reducing risk. People need to look further than a deposit account if they are to build up sufficient capital to live off in the long term. Stock market volatility may well be unsettling, but it will not give rise to the sleepless nights that a lack of financial preparation will inevitably bring about."

For further information please contact:

Anne McMeehan, Director of Communications, AUTIF, 0171 831 0898
Clare Arber, PR Manager, AUTIF, 0171 831 0898
Emma Weiss, Communications Manager, AUTIF, 0171 831 0898

Notes to Editors:

*FACETS (Financial Awareness and Consumer Education Tracking Study) is sponsored by the Association of Unit Trusts and Investment Funds (AUTIF) and is a cross-population study based on independent data collected by RSL, one of the largest operations working in this area and a leading exponent of computer assisted personal interviewing; and is then analysed across a wide range of socio-demographic splits using MarketMinder (For further details contact Mike Hare - MarketMinder - Tel: 01778 345588)

Each month a sample of 1000 people is filtered to isolate those responsible for making financial decisions. It is rigorously selected to reflect the balance of the adult population by sex, age, socio-economic group and geographical location. People are interviewed on a face to face basis to ascertain their understanding of basic personal finance matters that are likely to affect them. The sample for this particular survey of stock market expectations was then filtered to include only ‘investors’ with at least a higher rate deposit account (ie also holders of TESSAs, National Savings, life assurance bonds, unit and investment trusts, PEPs, ISAs, OEICs, any shareholdings, regular premium life assurance contracts, any pensions or offshore bonds).