A recent survey by Investors RouteMap claimed that unit trust investors have lost £10bn over the last 8 years.
According to the results, unit trusts in the All Companies sector had under performed the FTSE All Share Index by 4% over the last 8 years. This 4% excluded charges so any charges made within the unit trust would have extended the losses further.
Our View:
Stock market investments have to be looked at over at least the medium term (5 - 10 years) in order to see results. However, even if you do hold investments for that period, your 5 to 10 year ending point could come at a stock market low.
People that invest in the stock market have to be prepared for losses and the best investment is one that can be left invested and not have to be cashed in at a bad time. Charges will always affect the performance of investments and the higher they are, the less you will get back. If you add this to an already under performing investment, your losses could be substantial. Always compare charges and the relative value for money.