CTF discussion area

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I personally think

the Skipton BS Cash CTF fund

might be worth considering.

Investors' Association link - You won't be in time to take advantage of this possible imminent mini-windfall from Skipton - see tomorrow's Sunday press for details - but there may be others further down the line

And Skipton, unlike some other mutual misers, has established the precedent of paying out windfalls to children on past investment success, as seen when they sold Dealwise in 2000 and dished out an average of £170 to long standarding members from 1996.

See this IA link for details

ViksB

Do you think 250 would be sufficient as a minimum amount or would it be better to invest more? to ensure the likelhood of getting a windfall if any came along?

All the stakeholder Building socity accounts seem to be run by people other than than the Building society so I am assuming they would not be eligible?

Vikki

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You are correct to say that the stakeholder CTFs are probably won't ever yield a windfall as they will never confer membership of the society.

For cash CTFs you would have to decide what sort of windfall you have in mind.

a) In the highly unlikely event of a demutualisation at big boys Nationwide or Britannia - the £250 could bring a significant windfall e.g. £500+. Never say never, but the management of both are die-hard mutualists and the membership also supports mutuality.

b) In the slightly more likely event of a takeover of a small/medium society - e.g. Britannia snaffling up Ipswich or Hanley Economic - then there might be a basic windfall of, say, £50 gross for Ipswich/Hanley investors, with some variable element.

BUT in each of the above cases children might be excluded [less likely in a) than b) on the basis of the most recent examples].

c) At Skipton, if they made a profit on their subsidiaries over the next decade and sold one off, then they tend to use a variable rate calculation ie a small % of savings balances. £250 is likely to be eligible, but the more you invest the more you stand to gain.

Of course this is speculative, and in the meantime, Skipton may not pay the top rate.

A bird in the hand (good interest rate) is worth four in the bush (a windfall that might never happen).

Current rates include:

Yorkshire BS 6% (5.3% + 0.7% first year bonus).
Britannia BS 5.75% (4.5% + 1.25% bonus for the first two years)
Hanley Economic 5.5% (but only if you live near the Potteries)
Ipswich BS 5.25% (a rapid recent fall from 6% )
Nationwide BS 5% (rising to 6% if you pay in £240 pa ).
Skipton BS 5.05%
Furness BS 5.00%

ViksB

Thanks for all the advice
Vikki

jolenejolene

Hi,
I just wonder if anyone can give me their thoughts on whether it is best to put more money into a CTF (stakeholder with F&C) or put some into a baby bond with the childrens Mutual? I set up a baby bond for my daughter before CTFs came along and then add some per month into her CTF. I have since had another one (!) and wonder whether to split the monthly payments for him or to put the whole amount into a CTF?
Hope that makes sense!?
thanks,
Jolene

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It looks to me that the only clear advantage of the Baby Bond is that you can set the maturity date to your child's 21st birthday if you are worried about them getting the money at 18.

sjrobs

Hi All,

sorry if something similar has already been posted.

Can anyone out there recommend / suggest a home for my childs CTF that is medium to high risk (and therefore potential for medium to high growth).

Preferably something with low charges and that you do not have to add additional funds to.

I just want to put the cheque in, and leave it there for about 10 years, then transfer it to something a bit safer.

We already have a standard childs savings account that we will hand over at 18!

Please help

sjrobs

dunstonh

We cant recommend funds but its generally considered that the childrens mutual have the best CTF out there. Most of the providers actually "white label" the childrens mutual product so its really the CM product but with their own label on it.

ReportInvestor

sjrobs wrote:

Can anyone out there recommend / suggest a home for my childs CTF that is medium to high risk (and therefore potential for medium to high growth)

Here's a recent Financial Mail article that supports dh's comment about The Children's Mutual

Unfortunately you need to make additional investments of minimum £50pm to invest through them into a shares CTF with someone like InvescoPerpetual.

There is loads more press comment about the different funds here

My suggestion to consider from a Money Saving (rather than investing) point of view would be Foreign & Colonial (also mentioned in Martin's article). You can choose from a range of Investment Trusts and the charges are low.

I phoned F&C up and they confirmed that you could invest the £250 voucher and just leave it there .

If you chose the flagship Foreign & Colonial Investment Trust you would pay:
0.5% Stamp Duty (a one off charge)
0.2% between the buying and selling price of the IT
0.7% pa CTF plan management charge
0.5% pa Fund Total Expense Ratio (includes a very low 0.3% management charge)

That's 1.2% Total annual costs and a 0.7% total initial costs. I doubt that can be beaten in the CTF world - especially if you don't add regular contributions.

Many of the other CTFs will have a 5% initial charge and a 1.5% annual management charge which will end up as as a 2%+ total annual costs, so although these stakeholders will track the index, they won't ever come close to matching it.

jolenejolene

Hi,
Just re my post a little higher up.... can anyone tell me whether in theory (I know you can never be sure!) I should (or my son should) get a better return putting the same amount per month into a baby bond or into a CTF stakeholder account? If the CTF is better, should I cash in the babybond (I would lose only a small amount) and put the whole amount into a CTF?
Thanks - I am trying to be fair to both kids!!??
Jolene