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Money: Beware of the shooting stars

Saturday 14 March 1998 19:02 EST
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THE DIFFERENCE between the best and worst investments is always disconcertingly large and often large enough to discourage many investors who are looking for an excuse not to take any action. Past performance is not always an infallible guide to the future and some investments are the equivalent of nine-day wonders, achieving top billing by loading money into a specialised sector which outperforms only occasionally.

Over time the top billings in investment ratings also change, so that a 10-year record can look very different from a 25- year record and with- profits funds can vary substantially from unit-linked funds even from the same firm of fund managers. Even funds fed by regular premiums can perform better or worse than single-premium funds managed by the same company, and funds can be ousted from the top tables by quite small annual changes.

Consistency is the key to sound performance. A review of personal pensions published by Money Management this month shows that among with-profits policies, Co-operative Insurance produced the best results over various periods from regular premiums, but National Mutual did best with single premiums. But only four companies were in the top six for both regular premiums and single premiums, and they were Royal London, Scottish Mutual, Scottish Widows and Wesleyan Assurance.

Readers who are looking for help in making the most of their investments can write for a free guide, written by Steve Lodge and sponsored by Wesleyan. Readers should ring 0800 137 9749, or complete the coupon on page 16 and send it to Freepost Mid 00001, Swindon, Wilts SN38 1XZ.

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