Cash CTFs 'outperform stakeholder options'

Cash Child Trust Funds (CTFs) offer greater returns than stakeholder options, according to new analysis.

Stakeholder CTFs outperformed cash options in the first two years after the accounts were introduced, figures from Moneyfacts show.

However, cash CTFs have remained constant and are now worth 24.2 per cent more than the average opening sum of £250 at £310.

In contrast, stakeholder CTFS are now worth a quarter less than the opening amount, with the average valued at £232 – a loss off seven per cent in four years.

Volatility in the stock market saw stakeholder CTFs dip by more than 26 per cent last year, while cash accounts grew by a stable 5.1 per cent.

Richard Eagling, editor of investment life & pensions at Moneyfacts, said: ’Although the stock market turmoil has meant disappointing returns for stakeholder accounts so far, the long-term nature of the Child Trust Fund should ensure there is plenty of time for a recovery.

’Indeed, there are signs that their performance is starting to improve, with stakeholder funds up eight per cent already this tax year.’
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