CTF discussion area

baby_boomer

Telegraph link - £100 million wiped off CTF funds

".....A £250 Government CTF voucher invested in one of the biggest CTF schemes, the Children's Mutual Baby Bond, at the beginning of the year would now be worth around £159, according to Morningstar, the fund analyst. A voucher worth £250 three years ago would now be worth around £200 having lost 19 per cent..."

"....David White, Children's Mutual CEO said: "Parents understand it is a long-term game. They have seen the headlines on the financial crisis and economy and understand it is a bigger issue than fund performance. If you had invested in a child trust fund 18 years ago you would have doubled your money – and that is despite market crashes along the way...."

True. But you could have already gained 20% in cash over the last three years. And you would also have doubled your money by having it in cash.

However now is possibly not the right time to panic if you have lost money. Those who are prepared to grit their teeth may still recover those losses in time.

JF77

Thanks Baby Boomer.

You replied to my thread about this specific issue that I am facing.

I am tempted to leave mine as it still has 13 years to run but, I am not sure weather to leave the monthly payment at £60 or to decrease it.

Is my £60.00 buying lots of shares very cheaply that could rise in value and, therefore this could be a good thing?

JimmyTheWig

JF77 wrote: »

Is my £60.00 buying lots of shares very cheaply that could rise in value and, therefore this could be a good thing?

Yes, definitely.
(Obviously they might also down in value - but my guess is that as long as you are in for the long haul then buying now in monthly installments is a good move.)

k4thl33n

I ahve a non stake holder CTF which appears to have lost a bit, but not as much as the stakeholder or shariah. Is it due to the fact that the other two are linked to the FTSE whereas the non stakeholder is in the ftse 250? Please could you also confirm that if prices are dropping that for each monthly installment, units being brought will be more rather than less, so when the markets pick up the funds will hopefully regain their initial losses due to the world wide economic downturn at present?

k4thl33n

Hi. Just another question to ponder on.... Child trust funds are very much run along the same vein as Pensions, other than the 40% tax which is due on pensions. There is no guarantee that at the end of the 18 years that anything will still be in these even if stock markets still exist then. Non of the CTF accounts are safe from losses, this initially seemed like a ggod idea when the government introduced these, but looking from an outsiders perspective, it now looks like a free loan yet again for companies playing with our hard earned money with no guarantees of any kind at the end of the day. I wonder if it would actually make more sense to just invest in a trust account playing the stock market myself rather than paying a monthly contribution for these companies to gamble money that has trustingly been placed under the banner of a 'carrot' which has been offered by this government? I wonder whether Canada plays the same game with the incentives they give to parents for the newborn? Is it fair for us to jepodise our children's future security by placing money into these funds?

cuteusmaximus

I have two F&C Stakeholder CTF accounts that I am happy with. Just had a third kid and started looking around again.

My payments go in via monthly direct debit, which is fine, but I'd really like to be able to log in and check the current value of the fund. Even better would be the facility to add into the account electronically. I have a stack of top up forms from F&C but I find it annoying to write cheques and send stuff in the post.

Thanks
CM

herbie72

We're about to invest our £250 voucher in a CTF and really want to put it in the Family Charities Ethical Trust Fund, but I'm really scared about sticking it on the stockmarket. I'm new to the investing game, and worry that all the cash paid in will vanish if another crash occurs many years down the line.

I googled the FCETF and it seems to have performed much worse than other investments recently.

http://www.citywire.co.uk/professional/fund-and-fund-manager-performance/fund-factsheet.aspx?FundID=7000

What should I do?! Help!!

Thanks all!

Tim

JimmyTheWig

herbie72 wrote: »

We're about to invest our £250 voucher in a CTF and really want to put it in the Family Charities Ethical Trust Fund, but I'm really scared about sticking it on the stockmarket. I'm new to the investing game, and worry that all the cash paid in will vanish if another crash occurs many years down the line.

I googled the FCETF and it seems to have performed much worse than other investments recently.

The idea of a stockmarket investment over this period of time (with lifestyling, so that the risk is slowly reduced as the end of the term approaches) is that they are very likely (crashes included) to outperform a cash investment.
There is a risk that they won't perform so well, and even a risk that they will dwindle away to almost nothing. But the chances are you're better off investing it rather than saving it.
But it's your choice depending on your attitude to risk.

I presume you like the fund you mention because it is ethical. Then it sounds like you need to decide whether to accept a poorer return to have an ethical product or go for a top performing product.
Again, that's a decission only you can make.

herbie72

JimmyTheWig wrote: »

The idea of a stockmarket investment over this period of time (with lifestyling, so that the risk is slowly reduced as the end of the term approaches) is that they are very likely (crashes included) to outperform a cash investment.
There is a risk that they won't perform so well, and even a risk that they will dwindle away to almost nothing. But the chances are you're better off investing it rather than saving it.
But it's your choice depending on your attitude to risk.

I presume you like the fund you mention because it is ethical. Then it sounds like you need to decide whether to accept a poorer return to have an ethical product or go for a top performing product.
Again, that's a decission only you can make.

Thanks mate. That's exactly the situation - we want to do something ethical with the money, certainly, and according to MyNestEgg.com, it has (and I use that word strongly!!) been returning almost 10% per year until the crash. So I'm really torn!

peterbaker

These CTF's haven't returned anything yet except to the winners involved in buying from or selling to the CTF 'fund managers'(sic) - any value is inaccessible until the child's 18th birthday, and until then it is as much a paper value as the voucher you started it with.

Whoever decided it was sensible to allow so many CTFs to be linked to equities in such haphazard fashion should probably be shot.