For
immediate release: Friday 24th May 2002
EQUITIES VS DEPOSIT
RETURNS OVER THE LONG TERM
QUARTERLY
CHARTPACK
The attached charts compare savings and
investment returns (income and growth) over five, ten and
fifteen year periods, for both lump sum investment and
regular savings plans.
-
Over 10
years to 1 April, the annual income on £1,000 invested
in an average UK Equity Income fund rose to £69.
The income from a Corporate Bond fund fell to £43,
while the savings income on an average building society
deposit account dropped to £15 in the tenth year
falling from £51 in 1992.
[Chart
1]
-
The
capital invested in an average Corporate Bond fund in
March 1992 had grown by 27% over the 10 years,
compared to 103% 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 1992 added £327 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 £2,027. The Equity
Income fund grew by 187% to £2,870 or £3,098
in an equivalent ISA/PEP.
[Chart 3/5]
-
Over the
ten-year period to the end of March 2002 average returns
from UK Equity Income funds were similar to those
achieved by UK All Companies funds and Global Growth
funds. After 10 years £1,000 invested in the UK Equity
Income sector had become £2,870 compared to £2,382
in the Global Growth sector and £2,644 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 £254. After 10 years
however the equity investment in a UK All Companies fund
outpaced the deposit account by £1,705 and by £5,570
after 15 years. [Chart 6]
-
A £1,000
investment in a UK Equity Income fund was 37%
higher than an equivalent Managed Life fund investment
after 10 years, but 116% higher than the average
building society deposit account for the same period.
The difference on a £50 regular savings plan over 10
years was 18% on the Managed Life fund and 32%
on a deposit account.[Charts 7/8]
-
After 15
years, a £1,000 lump sum invested in a UK Equity Income
fund ran 87% ahead of a deposit account and 45%
ahead of the Managed Life fund; while the £50
regular savings unit trust / OEIC plan ended 56% higher
than the deposit account and 25% higher than the
Managed Life fund. [Charts 7/8]
-
After 10
years, £1,000 invested on a lump sum basis in an
average UK Equity and Bond Income fund beat the Retail
Price Index by 95% or 113% in an ISA /
PEP. The deposit account was 4% ahead of the
Retail Price Index.
[Chart 9]
-
Over
ten years, the top three performing sectors were the
North American Smaller Companies (return of £3,816 on
£1,000 lump sum), Europe including UK (return of £3,604
on £1,000 lump sum) and North America (return of £3,486
on £1,000 lump sum).
[Chart 10]
-
ends -
For further information please
contact:
Clare
Arber, Head of Communications, IMA, 020 7831 0898
Dorian
Carrell, Head of Statistics, IMA, 020 7831 0898
Helen
Stephenson, PR Assistant, IMA, 020 7831 0898
Attachment
1: Charts 1-9
Attachment
2: Chart 10
65
Kingsway London WC2B 6TD
Tel:
+44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975
www.investmentuk.org
Investment
Management Association is a company limited by guarantee
registered in England and Wales Registered number 4343737.
Registered office as above.
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