Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 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