For Immediate Release: Tuesday 8 May 2001
QUARTERLY CHARTPACK SHOWS EFFECT OF STOCKMARKET SLOWDOWN
ON LONG TERM INVESTMENT FUND SAVINGS
The UK stockmarket has slipped by some 9% over the three
months to the end of March and this period is covered in the
attached charts. Although the effect was to trim the returns
on all equity based investment, over the long term the
stockmarket still proves to be the more rewarding place to
save.
- Over 10 years to 1 April 2001, the annual income on
£1,000 invested in an average UK Equity Income fund rose
to £62 after 10 years. The income from a Corporate
Bond fund slowed to £58; while the savings
income on an average building society deposit account
dropped to £24 in the tenth year, falling from £72
in 1991. [Chart 1]
- The capital invested in an average Corporate Bond fund
in March 1991 had grown by 29% over the 10 years,
compared to 85% in an average UK Equity Income
fund. [Chart 2]
- A lump sum of £1,000 invested in an average building
society deposit account in March 1991 added £402
to its value over 10 years, whilst the investment in an
average Corporate Bond fund (including both income and
capital growth) more than doubled to £2,162.
The equity income fund grew by 165% to £2,654 or
£2,899 in an equivalent ISA/PEP. [Charts
3/5]
- Over the ten year period to April 2001 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 £2,654, compared to £2,556 in the
Global Growth sector and £2,729 in the UK All
Companies sector. [Chart 4]
- On regular savings of £50 a month, an equity investment
in a UK All Companies fund beat the savings account
deposit after 5 years by £97. The
difference increased to £2,920 over 10 years and £7,690
after 15 years. [Chart 6]
- A £1,000 investment in a UK Equity Income fund was 21%
higher than an equivalent Managed Life Fund investment
after 10 years, but 89% higher than the average
building society deposit account for the same period. The
difference on a £50 regular savings plan over 10 years
was 15% on the Managed Life Fund and 43% on
a deposit. Charts 7/8]
- After 15 years, a £1,000 lump sum investment in a UK
Equity Income Fund ran 136% ahead of the deposit
account and 57% ahead of the Managed Life Fund;
while the £50 regular savings unit trust/OEIC plan ended 66%
higher than the deposit account and 23% 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 77% or 96%
in an ISA/PEP. 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 £3,000 – Europe ex UK, Europe inc UK,
European Smaller Companies, North America, North American
Smaller Companies and UK Smaller Companies.
- A £50 per month regular savings plan over ten years,
would have achieved returns of more than £11,000 in the
average funds of the following sectors – Europe
excluding UK, Europe including UK, European Smaller
Companies, North America, North American Smaller Companies
and UK Smaller Companies sectors. [Chart 10]
For further information please contact:
Anne McMeehan, Director of Communications,
AUTIF - +44 (0)20 7831 0898
Dorian Carrell, Head of Statistics, AUTIF - +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898
Attachment 1-
Charts 1 - 9 (in PDF format)
Attachment 2 - Chart 10 (in PDF
format)
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