anyone else got a stakeholder CTF? mine seems to be losing money...

[CatIsSleepy]

dd's CTF is worth less than the money we have put into it over the last 2 years and am not sure what to do-switch providers, switch to an interest CTF or just sit tight and bury my head in the sand...

Anyone else in this position?

I know investment's a long term thing but I get a bit twitchy when I see money disappearing. And I know stock market is probably not great right now so perhaps I should just try not to worry about it.

the bottom line is, I don't know what to do aaaarggghhhh

I'm in the same boat, Cat. The first year, it made plenty of money, but last year and this (so far), I'm losing it.

I'm going to stay put, because my CTF provider is highly regarded, and I can't see any other provider necessarily doing any better at this stage.

I'm going to sit tight for a couple of years yet, I reckon.

hey desi

well this is our second year and I'm not sure it made anything in the first year either.
Am sure they must all be losing money atm though.

But I don't know whether to trust my provider or not really. It was Nationwide then they handed it over to Legal and General.

Who are you with if you don't mind me asking?

am VERY risk averse btw and it was rather uncharacteristic of me to for the equity CTF rather than interest CTF in the first place

to go for, that should say

desi come baaaaaaaaack

or anyone??

Pretty much any fund will have lost money over the last year. You're in it for the long term, so you will only have made a loss if you switch into cash now -- over the next 15 years, all the evidence suggests equities will do better than cash.

Having said that, I do think stakeholder CTFs are a bit of a mis-sell, as people are fooled into thinking you have more of a safety net than you actually do. We went for a much more risky non-stakeholder CTF (F&C smaller companies) on the basis that it's a relatively small amount of money, so might as well take a gamble on it. Having said that, we're not making extra payments into it.

I think your decision depends on how much other savings you have for your child. If that is the only money you have, then you might want to consider putting some of your extra payments into a cash account. But unless things are financially very very tight, I'd be inclined to stick with the equities. Switching providers from one stakeholder fund to another probably won't make much difference, as most of them are quasi-index trackers anyway. L&G and Nationwide are pretty mainstream, well-regarded providers. And there is a powerful argument that small monthly savings are the way to go in an uncertain market, as you're effectively buying more units when they're cheap, so you end up with a better deal overall, iyswim.

Sorry, old bean! I was ironing

Well, I'm with Family Investments, who are one of the largest, most established providers.

I'm not risk averse, so I'm happy with the principle .. and tbh, the money it made in the first year was amazing, so I'm prepared to stick it out in the hope that the markets turn around.

It's a long term plan, after all, but I will consider moving if it starts to lose serious amounts of dough over, say, the next three years.

thanks desi and frogs!

yes, have heard Family Investments are good.
Frogs that's a good point re extra payments- have been putting part of dd's Child Benefit money in every month. Am now considering reducing what I pay into the CTF and as you say opening a cash account as well-maybe split it 50:50. It might stop me twitching so much!

as you were, desi-back to your ironing

but frogs, you don't think there's much to choose between providers?
desi is the Family Investments CTF a Tracker fund?

sorry to harp on

My understanding of stakeholder funds (and I'm not an expert, as we ruled them out fairly early on) is that because the costs are so tightly controlled, providers are very restricted in the type of fund they can offer, so most will be offering their most 'vanilla' fund for the CTF, which will consist largely of mainstream FTSE100 shares, ie. will follow the index pretty closely.

And in any case, as the adverts warn you, past performance is no guide to future value.

The differences between funds will be more pronounced at the non-stakeholder end of the market, where you can choose eg. emerging markets, China, smaller companies, US, etc etc. But again, you can't really predict what they'll do -- you just have to pick something that fits your risk profile and stick with it. Also bear in mind that a paper loss only = a real loss at the point where you sell up.

As long as you're happy that your reasons for making the decision in the first place were sound, it's probably better not to follow the value too closely tbh. But if you have no other savings for your child, you might want to consider diverting your additional contributions into something that will let you sleep at night.

thanks frogs that helpful

that's helpful

we have two engage mutual ones. they are doing OK (hover around the 0.70 mark at the moment and in the last year). They have been a bit higher, but I figure (since we drip feed money into them) that we will do OK since presumably if you pay monthly, when unit costs are cheap your money get more units?

well this is true you get more units when they are cheap

I suppose the stock market will go up eventually...