Endowments am i missing something

Coveredinbees!!!!

I took an interest only mortgage with an Endowment policy with our first house for £50400 in September 99.

This policy gives both myself and my wife £50400 cover so if either one of us dies the mortgage is paid off. In the early years of the policy the unit value fell from 1400p to 1031p which is bad obviously but when the unit price was low I was getting more units for my money. The unit price has now risen again up to 1449p ( sept 05 ) so all my cheaper units have risen by 40 odd %. I calculated a growth of around 15% last year over september 04 figures. I think we're doing ok but am I missing something???

ReportInvestor

No - You've worked it out pretty well

It sounds like you have a unit linked endowment, not a conventional with profits endowment.

As such you are dependent on investment performance - and don't have the appalling legacy associated with some With Profits endowment.

That is good news!

What fund are you invested in? The FTSE went up 18% in 2005, but your fund may not ne a 100% equity fund, so that may not be a fair comparison.

You are right to be pleased that your new money has bought units when they were low. This is known as "pound cost averaging" and is good news for investors like yourself if there is a market fall but the overall trend is up .

And your units will now be worth quite a bit more than in September 2005

Coveredinbees!!!!

It's a legal and general flexible mortgage plan, it doesn't say on the paperwork where the money is actually invested but I'm going to find out.

dunstonh

1999 start date would mean that most of the investment started after the stockmarket crash. Your timing (at this stage) means that you probably have a very good one, providing it is unit linked).

Too many people have been looking at the short term impact of the stockmarket and assumed that their endowment was rubbish. For many it did have a significant impact but others it has been a great opportunity. In your case, you fall in to the latter.