For Immediate Release: Tuesday 23 October 2001

QUARTERLY CHARTPACK 

STOCKMARKET SLOWDOWN AND THE EFFECTS OF SEPTEMBER 11

The recent downturn in worldwide markets and last month’s tragic events in America have had a marked effect on the UK stockmarket, which has fallen 12% over the three months to October 2001. Charts 3 and 5 illustrate that despite the short-term losses suffered as a result of this decline, the long-term benefits of remaining invested in equity-based products, continue to outweigh more secure building society deposit accounts. 

• Over 10 years to 1 October, the annual income on £1,000 invested in an average UK Equity Income fund rose to £64.  The income from a Corporate Bond fund slowed to £47; while the savings income on an average building society deposit account dropped to £22 in the tenth year, falling from £63 in 1991.
  [Chart 1]

• The capital invested in an average Corporate Bond fund in September 1991 had grown by 25% over the 10 years, compared to 60% in an average UK Equity Income fund.  [Chart 2]
  
  
• A lump sum of £1,000 invested in an average building society deposit account in September 1991 added £363 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 £2,033. The Equity Income fund grew by 128% to £2,283 or £2,480 in an equivalent ISA/PEP. [Chart 3/5]
  

• Over the ten-year period to October 2001 average returns from UK Equity Income funds had become £2,283 compared to £2,088 in the Global Growth sector and £2,212 in the UK All Companies sector.    [Chart 4/5]
  
  
• On regular savings of £50 per month, a savings deposit account beat an equity investment in a UK All Companies fund after 5 years by £515. After 10 years however the equity investment in a UK All Companies fund outpaced the deposit account by £1,100 and by £4,173 after 15 years. [Chart 6]
  
  
• A £1,000 investment in a UK Equity Income fund was 26% higher than an equivalent Managed Life fund investment after 10 years, but 68% higher than the average building society deposit account for the same period. The difference on a £50 regular savings plan over 10 years was 19% on the Managed Life fund and 22% on a deposit account.  [Charts 7/8]
  
  
• After 15 years, a £1,000 lump sum investment in a UK Equity Income fund ran 112% ahead of a deposit account and 66% ahead of the Managed Life fund; while the £50 regular savings unit trust / OEIC plan ended 43% higher than the deposit account and 27% 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 60% or 75% in an ISA / PEP. The deposit account was 6% ahead of the Retail Price Index. [Chart 9]
  
  
• Over ten years, the top three performing sectors were the North American Smaller Companies (return of £3,548 on £1,000), North America (return of £3,264 on £1,000) and Europe including UK (return of £3,181 on £1,000)  [Chart 10]

 Ends

For further information please contact:

Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898

Dorian Carrell, Head of Statistics, AUTIF - +44 (0)20 7831 0898
Helen Stephenson, PR Assistant,  AUTIF - +44 (0)20 7831 0898

Notes to Editors:

Source: Reuters Lipper, Figures based on market closing prices. Gross investment reinvested at pay date 29/06/01 to 28/09/01

Attachment 1- Charts 1 - 9 (in PDF format)

Attachment 2 - Chart 10 (in PDF format)