Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Investments and Pension Funds Feeling the Winter Blues

Personal_Finance / UK Stock Market Dec 17, 2007 - 08:13 PM GMT

By: MoneyFacts

Personal_Finance

With the end of another year rapidly approaching, now is an ideal time to reflect upon the key financial events of the past twelve months and what 2007 has meant for consumers. For most savers and investors 2007 has proved to be another challenging year.

So how have the different products fared over the last year, and what have been the major developments?


Investments: A roller coaster ride
Investing has certainly not been for the faint hearted during 2007, with world stock markets experiencing high volatility as a result of the problems in the US sub prime mortgage market and the subsequent credit crunch.

With its high weighting in financials, the UK equity market has proved particularly vulnerable to the credit crunch. In mid August the FTSE 100 plummeted as low as 5,858 after suffering a 4.1% fall in just one day. However, it has bounced back strongly since and at the start of December stood at a more comfortable 6,432, a rise of 3.4% for the year.

In contrast to the last few years, where most of the top UK funds delivered impressive double digit returns, this year’s performance has been more disappointing. The average UK All Companies fund has fallen 2.7% over the year to date, whilst the average UK Smaller Companies fund has posted an even bigger loss of 9.6%.

Whilst the UK has been amongst those hit hardest by the credit crunch, Asia has emerged relatively unscathed, with China in particular enjoying a phenomenal 2007. Lipper figures show that the Asia Pacific Excluding Japan sector was the biggest success story of the year, with the average fund posting growth of 27.8%.

Not surprisingly, as Table 1 reveals, the top ten performing unit trust/OEIC funds over the last 12 months are almost exclusively to be found within the Asia Pacific Excluding Japan sector. Gartmore China Opportunities has produced the strongest performance over the last 12 months, returning £1,781 on an initial £1K investment, followed by Jupiter China (£1,676) and Invesco Perpetual Hong Kong and China (£1,641). Disappointingly, the average unit trust fund posted growth of just 1.6% during the latest 12-month period, down significantly on the 6.1% average growth enjoyed in 2006.

Table 1: Top 10 Unit Trust/OEIC funds over 1 year

Source: Lipper Hindsight. Figures based on £1K lump sum as at 1 December 2007, total return, UK net, initial charges applied
12.12.07

With profits bonds: Out of the rough
With profits investors also received some better news in 2007. After years of waiting patiently, those individuals who kept faith with their with profits bonds through the turbulent investment conditions at the start of the decade are finally reaping the rewards. During the last 12 months, our with profits bond surveys have highlighted how payouts are starting to rise, terminal bonuses are back on the menu whilst menacing market value reductions have all but disappeared. The average five year with profits bond is now returning £34,815 (based on a £25K initial investment) compared with just £29,540 a year ago, an increase of 17.8%.

Pensions: Not out of the woods yet
The credit crunch may have knocked the pensions crisis off newspaper front pages in recent months, but there have still been plenty of talking points within the pensions industry. On the plus side, pension business has continued to boom in the post A-Day landscape, whilst the Government’s new system of personal accounts has started to take shape. However, the volatile stock markets have taken their toll on most pension funds, with the average pension fund posting growth of just 3.59% over the last 12 months compared with 7.2% in 2006.

Annuities: A pleasant surprise
Arguably the biggest surprise of the year has come in the annuity market, where rates halted their historical decline and actually increased. At the time of writing, the average level without guaranteed standard annuity rate for a 65-year-old male has risen by 4.9% over the last 12 months, whilst female rates have increased by 5.7% (see Table 2). Unfortunately, there are signs that annuity rates may have peaked, with a number of reductions beginning to creep in over the last month.

Protection: Price war continues
2007 has proved to be another tough year for the protection market, with providers facing an uphill struggle to rebuild consumer confidence and revive flagging sales. There has also been no let up in the price war that has engulfed the term assurance market in recent years, with the cost of cover falling throughout 2007. The most competitive £100K sum assured level term assurance premium for a non-smoking male aged 30 over a 25 year term has decreased 7% from £6.61 December last year to £6.13 now (see Table 2).

Richard Eagling, Editor of Investment, Life & Pensions Moneyfacts commented: “It may be the season to be jolly, but for many savers and investors, events over the past few months have brought precious little in the way of Christmas cheer. Instead, the prevailing sense of uncertainty created by the ongoing credit crunch and stock market volatility is in danger of serving up a large dose of the winter blues.”

Table 2: The Difference a year makes 2006 versus 2007

www.moneyfacts.co.uk - The Money Search Engine


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in