Research identifies average return on cash Child Trust Funds

Sainsbury’s Bank stakeholder Child Trust Fund provides return of 8.92% over the past 12 months.

Analysis of industry data by Sainsbury’s Bank whose stakeholder Child Trust Fund provided a 8.92% return over the last 12 months, reveals that the average return on cash Child Trust Funds is 5.63%. However, once introductory bonuses are removed, this falls to 5.45%. The Bank says that with a strong stock market performance, the winners so far have been parents who have chosen Child Trust Funds that have a level of exposure to equities.

Although mainly invested in equities, the Sainsbury’s Bank stakeholder Child Trust Fund also has exposure to a number of different asset classes, such as fixed interest securities and cash. Over the past 12 months, it produced returns of 8.92%, after charges and 23.35% since its launch in April 2005.

Peter Wood, Head of Savings at Sainsbury’s Bank said: “In choosing a Child Trust Fund, parents need to remember that they are saving for the long term, some 18 years, and whilst carefully considering the investment risk , they should note that over the long term, equities have consistently outperformed cash."