FTAdviser.com

Advertising

According to recent research, savers putting their money into funds investing in UK shares would have generated a better return since 2000 by putting the same funds in a savings account instead.

Research by Thomson-Reuters Lipper, commissioned by the BBC, demonstrated that if £1000 had been invested at the start of this decade, it would now be worth £1094 in an average UK unit trust, but £1358 in a typical savings account.

It found that £1000 invested in a UK equity income fund would have made less than the same amount invested in an instant savings account, achieving a total sum of £1,302.

However, the research also found that if anyone had chosen to invest in commodities or natural resources in 2000, their investment would have more than tripled by now.

Industry response emphasises the importance of timing: "It is a longer term question of when you are putting your money in and when you are taking money out," said Jane Lowe, of the Investment Management Association.

Ms Lowe also reiterated the difficulty of predicting the peaks and troughs of the market and stressed that over the long-term this form of investment is still a better bet than savings accounts.

Martin Bamford, joint managing director at IFA Informed Choice, said: "You can always manipulate performance figures when you look at different timeframes.

"While it is true that savers would have been better off placing their money in a savings account, in the long term it is better to have a diversified portfolio, that includes cash, shares and other asset classes."