Child Trust Fund gone down in value!!

[StealthPolarBear]

We set up a L&G stakeholder account for DS. He is now 11 months old and we've just had the first statement, it's now worth £228! I thought it was very rare for stakeholder accounts to drop! Am I being thick or can someone tell me what's going on?

I believe it is a risk that they will go down, don't think there's anything you can do about it I'm afraid

no, i realise that, just was surprised it had gone down immediately. I got the impression the shares based ones were risky & the stakeholder ones weren't.
Thanks

it is disappointing though isn't it

Stakeholder accounts are shares-based accounts. Same same. Just that stakeholder accounts are supposedly more conservative and have limited fees. But in a falling market, even conservative funds will fall. It is the nature of the beast.

But if it rises, it can also happen very quickly and sharply.

Nothing guaranteed and all. Over 18 years, I would take (and have taken) the risk of an equity-based investment.

so has anyone else found it's dropped recently?

Erm, yes, credit crunch at all, especially if your fund invests primarily in UK and/or US. The last year has been tumultous for shares.

Check this website trustnet to track the performance of your fund over time as against a comparable benchmark eg FTSE All Share.

Fio you have an expirey date on the voucher, my Dd's one had just over 14 months from DOB

fiofio, even if you don't invest it, the government will do it for you after more than a year. It will be a stakeholder fund that they invest in and the government's choice.

I wouldn't worry about it
It is a long-term investment and you won't be touching it for years, it's swings and roundabouts on the stock exchange

dds went down too, I am sure it will creep back up over the years. Stakeholder accounts are a gamble, but a fairly safe one.

Yes, dcs have, in Feb they dipped a fair bit. I think you can move them whenever you want though. Long-term they're meant to be do better than ordinary savings.

I agree - shares are a long term investment so over the 18 yrs it should have evened out and it is still likely that it will be worth more than cash savings over the same period.

Don't know about CTF's specifically but a lot of savings plans have fees up front that make it look like the value of the fund has gone down but it is just the fees being applied and next year should be better.

You need to look on it as a long term investment - short term shares will always have their ups & downs but long term generally beat cash with an average interest rate. I'll eat my hat if in 18 years or so you are not better off with the shares option..

fair enough. Not too much of a surprise then.

DDs went down too - I thought it was becasue there are initial admin fees to come out?

it seems that way - fair enough. why doesn't it say that on the statement!

Thanks Stealth - this is what I had in mind

ooh that leather bow thing would stick in your throat and be very tough to chew

Lulabelle - why can't you move it? I thought you could move all of them, would be surprised if you couldn't!

It's a long term investment - it really doesn't matter what it is worth today.

Exactly - That's how confident I am ;)

well how about this instead?

Now that really would be a challenge!!