For Immediate Release: Friday 19 May 2000
180% DIFFERENCE IN LONG TERM GROWTH PROSPECTS BETWEEN
UK EQUITY FUNDS AND DEPOSIT ACCOUNTS
Over the past ten years since April 1990, a £1,000 investment
in the average UK All Companies fund would have grown to £3,316,
a healthy 230% return. The average deposit account would have
returned £1,491 for the same ten year period. The added value
of unit trusts and OEICs compared to deposit accounts is shown
clearly on the attached charts.
- Over 10 years to 1 April 2000, the annual income on £1,000
invested in an average UK Equity Income unit trust increased
to £69 after 10 years. The income from a Corporate Bond
fund stood at £67; while the savings income on an average
building society deposit account dropped to £21 in the tenth
year, falling from £95 in 1991. [Chart 1]
- The capital invested in an average Corporate Bond fund
in April 1990 had grown by 37% over the 10 years, compared
to 104% in an average UK Equity Income fund. [Chart 2]
- A lump sum of £1,000 invested in an average building society
deposit account in April 1990 added £491 to its value over
10 years, whilst the investment in an average Corporate
Bond fund more than doubled to £2,339. The equity income
fund grew by 198% to £2,983 or £3,294 in an equivalent PEP/ISA.
[Charts 3/5]
- Over the ten year period to April 2000 average returns
from UK Equity Income funds were similar to those achieved
by UK All Companies and Global Growth funds. After 10 years,
£1,000 invested in the UK Equity Income sector had become
£2,983, compared to £2,964 in the Global Growth sector and
£3,316 in the UK All Companies sector. [Chart 4]
- On regular savings of £50 a month, an equity investment
in a UK All Companies fund outstripped the savings account
deposit after 5 years by £914. The difference increased
to £5,+44 (0)20 over 10 years and £11,921 after 15 years. [Chart
6]
- A £1,000 investment in a UK Equity Income fund was 20%
higher than an equivalent Managed Life Fund investment after
10 years, but 100% higher than the average building society
deposit account for the same period. The difference on a
£50 regular savings plan over 10 years was 3% on the Managed
Life Fund and 54% on a deposit. [Charts 7/8]
- After 15 years, a £1,000 lump sum investment in a UK Equity
Income Fund ran 199% ahead of the deposit account and 55%
ahead of the Managed Life Fund; while the £50 regular savings
unit trust/OEIC plan ended 80% higher than the deposit account
and 14% higher than the managed life fund. [Charts 7/8]
- After 10 years, £1,000 in an average UK Equity and Bond
Income Fund beat the Retail Price Index by 83% or 106% in
a PEP/ISA. The deposit account was 7% ahead of the Retail
Prices Index. [Chart 9]
- £1,000 invested in an average fund in the following sectors
over ten years, would have achieved returns of more than
£4,000 – Europe including UK, European Smaller Companies,
North America and North America Smaller Companies.
- A £50 per month regular savings plan over ten years, would
have achieved returns of more than £15,000 in the average
funds of the following sectors – Europe ex UK, Europe inc
UK, European Smaller Companies, North America and North
America Smaller Companies. [Chart 10]
For further information please contact:
Anne McMeehan, Director of Communications,
AUTIF - +44 (0)20 7831 0898
Michael Quach, Head of Statistics, AUTIF - +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898
Attachment 1 - Charts
1 to 9 (in PDF Format)
Attachment 2 - Chart
10 (in PDF Format)
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