The January edition of ‘The Unitholder’ (as MM was previously titled) was unsurprisingly heavily weighted towards unit trusts. It was a time when these investment vehicles were gathering interest from the general public, as month by month returns in 1967 and 1968 were highly impressive - in 1968 alone, the FTSE rose by a huge 46.3 per cent.
However, during 1969 the economic climate changed and these previous highs could not be sustained as the index dropped 12.6 per cent. After allowing for reinvested net income and capital tax gains paid, only three unit trusts delivered a gain. However, more data showed that 81 out of the 182 trusts managed to contain or outperform the 1969 fall, showing the importance and skill of the fund managers.
Offshore funds had rapidly increased in popularity, and were now being launched at a faster rate than unit trusts. This was partly due to the difficulty obtaining positive returns in the UK market, so managers looked overseas for growth. The expectation for the remainder of the year was for offshore funds to become more prominent which, looking back retrospectively, was correct.
In fact, offshore funds have been in the mainstream news just recently. Panama springs to mind.
A feature titled ‘How to give money to your child’ was pretty self-explanatory. Two illustrations detailed the most effective way of passing down funds to future generations, in response to the 1968 and 1969 Finance Acts. The 1969 budget, removed the right to re-claim tax within an accumulation settlement when a child reached the age of 21, which caused issues for parents who were benefiting previously.
Between 1969 and today, the challengeof effectively gifting assets has played on the minds of many investors, who have been constantly looking at various trusts as potential means of passing assets for future generations. Although inheritance tax thresholds, especially concerning property, are due to be increased in the next few years, trusts will still form a key consideration.
Finally, on page nine we asked the question ‘Is the most important financial decision of your life the appointment of your investment manager?’ I’m sure for many it was, just as choosing an adviser is today.
In other news…..
The age of majority was reduced from 21 to 18 under the Family Law Reform Act 1969.
‘Two Little Boys’ by disgraced Australian entertainer Rolf Harris was number one.
‘MASH’ was the month’s big film release.
And….
A boeing 747 landed at Heathrow Airport, becoming the first jumbo jet to land in Britain.
