- 29% of people who save or invest on behalf of children normally do so at Christmas time, according to YouGov SixthSense
- Parents and grandparents, family and friends making regular contributions
- Which are the top performing investment companies over 18 years?
With costs of university and living still rising, those considering saving for children and grandchildren this Christmas will see financial gifts gratefully received in years to come by young adults ready for higher education or their first home.
Whilst we all want to see children receive lots of toys, it seems that many people want to balance this with a gift that will last long after Christmas Day. According to recent research by YouGov SixthSense, 29% of people who save or invest on behalf of children normally do so at Christmas time. Some 71% of parents and 29% of grandparents regularly deposit money into children’s savings and investment accounts. But it seems that 14% of other family members, and 4% of family friends, are also contributing. Those considering saving for children might like to consider a collective investment scheme such as an investment company, which allows investors to tap into the long-term potential of the stock market.
A lump sum investment of Â£100 made 18 years ago in the average investment company would now be worth Â£367. A Â£250 annual investment into the average investment company over 18 years, an investment totalling Â£4500, would have grown to Â£9508 to 31 October 2012, over double the amount invested. A Â£50 a month investment over 18 years in the average investment company would be worth Â£22,817 at 30 October 2012, over double the same amount invested in cash, Â£10,800.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC) said: “We all want our children to wake up to lots of presents, but an investment made for them now can provide a welcome boost in the future. For parents, grandparents or even friends looking to contribute to long-term savings for children this Christmas, investment companies are a good way to do so.”
“Any investment company can be used for investing for a child via a bare trust, a designated account or Junior ISA and there are a wide range of investment companies available that cover a variety of sectors, countries and risk profiles. Investment companies have many benefits including strong long-term performance, the closed ended structure and boards of directors to look after shareholder interests.”
Top performing investment companies over 18 years
Share price total return on Â£100 to 31 October 2012
|Average investment company||366.77|
|Baring Emerging Europe||European Emerging Markets||1429.69|
|Fidelity European Values||Europe||860.27|
|TR Property||Property Securities||816.11|
|Capital Gearing||UK Growth||798.06|
|Graphite Enterprise||Private Equity||762.4|
|JPMorgan European Smaller Companies||European Smaller Companies||751.11|
|Northern Investors||Private Equity||705.45|
|Invesco Perpetual UK Smaller Companies||UK Smaller Companies||692.89|
|RIT Capital Partners||Global Growth||688.67|
|Fidelity Special Values||UK Growth||678.14|
|BlackRock World Mining||Sector Specialist: Commodities & Natural Resources||653.14|
|Aberforth Smaller Companies||UK Smaller Companies||639.32|
|BlackRock Smaller Companies||UK Smaller Companies||622.66|
|European Assets||European Smaller Companies||621.25|
|Hansa Trust (A Ord)||UK Growth||616.6|
|Lowland||UK Growth & Income||591.47|
|British Empire Securities & General||Global Growth||590.23|
Share price total return on Â£100 to 31 October 2012 with 3.5% deducted for charges, stamp duty and market spread. Source: AIC using Morningstar.