Free lunch for no-brainers

Article Abstract:

United Kingdom unit trusts have performed well in the decade from 1988, according to the Association of Unit Trusts and Investment Funds. Building society accounts performed nearly as well in the first five years, but stocks performed better over the longer term. Unit trusts have not performed as well as the stock market itself, and charges have affected returns for investors. Investors in the largest 10 companies on the UK stockmarket could have performed better than unit trusts. Large companies have performed especially well, and the same performance is unlikely in the decade from 1998, but it may still be better than unit trusts.

Investment Offices, Investment Companies, Open-End Investment Funds, Mutual funds

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Relative merit

Article Abstract:

Goldman Sachs sees United Kingdom equities as attractive in relation to other European markets. The UK looks set to join European monetary union prior to 2002 so there is likely to be a move toward convergence in yields for government securities. Price-earnings ratios for the UK also appear more attractive than those of mainland Europe. The drop in the value of pound sterling since Jul 1997 should also help UK corporate earnings. UK markets are only relatively attractive and stock prices may not rise far.

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Follow the herd

Article Abstract:

UK personal equity plans (Peps) offer tax advantages and are likely to be used by some 50% of investors, according to Hargreaves Landsdown Asset Management. Investors do not expect a rise in share prices in 1996, but have tended to invest in Peps following a stock market peak. Timing is not as important for longer term investors, and their investments can perform better than investments in building societies. Pep charges reduce returns so should be examined.

Tax planning

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