How do I calculate the equivalent interest rate for a regular unit trust investment?

Thriftyknickers

Hi All,


Happy New Year! I've been feeding £50 per month now since 1/4/2007 into an Artemis Unit Trust. I know how much the fund is currently worth - £5,469.93 and how much I've paid in in total over the period - £3,750. Is there a tool or something so I can work out how much interest I'm effectively earning? I know I would need to check it on a monthly basis I guess and markets are volatile etc. Ideally I'm trying to figure out if it is better to keep my investment where it is or use part of it to finance a deficit in my holiday fund. Alternative sources I could hit are savings paying 4% net or a regular saver paying 2.5%. Any advice gratefully received!

jimjames

Investments don't pay interest. There are 2 elements to the return - the dividends you get and the capital value so you'd need to take both into account.

I'd always leave the investments as the last option and you should certainly be able to get more than 2.5% from investing so I'd use that first.

Archi_Bald

Your money has been invested something between 75 and 81 months. Your total return (minus any charges you might have to pay) in that period was £1,720, which is some 46% of the sum you paid in. So you averaged something around a 7% increase per annum.

You won't find any savings account anywhere that pays anything like this.

Thriftyknickers wrote: »

Alternative sources I could hit are savings paying 4% net or a regular saver paying 2.5%. Any advice gratefully received!

You have lost me there - - which savings account would pay you 4% net? Also, you should be able to get better than 2.5% on a regular saver (though nothing anywhere near 7%).

typistretired

Perhaps poster is referring to the Nationwide Flexdirect account

Linton

You have been paying in £50/month for 81 months. A 9% annual return would get you to £5474, near enough to your current value. But £50/month since 1/4/2007 is £4050 rather than £3750 so something must be wrong.

Thriftyknickers

Yes, typistretired is correct - the 4% is from the Nationwide account. I'll investigate the other comments. Many Thanks.

getmore4less

google "internal rate of return"

it works for all random any day inputs(savings) and outputs(withdraws) as well as regular investement.

the current value is what you would get out now.