EQUITY CTF FUNDS
Foreign & Colonial Investment Trust (www.fandc.com): With a total expense ratio (TER) of just 0.53 per cent, this is almost certainly the lowest-cost actively-managed fund option within any CTF. As well as being the oldest investment trust, it is also one of the largest global growth investment trusts in the world, and currently owns shares in more than 650 companies in 36 different countries. Its investment performance hasn't been bad either, with the share price returning 54.8 per cent over the five years to 31 July. F&C offers a choice of 13 investment trusts, including this one, via its CTF.
STAKEHOLDER CTF FUNDS
• F&C FTSE All-Share tracker fund (www.fandc.com): This is a low cost stakeholder CTF, with a TER of 0.35 per cent plus an annual CTF charge of 0.7 per cent, taking the total annual costs to 1.05 per cent. Our writer's grandparents are contributing the maximum £1,200 a year to help fund a place at university for their grandchild. Our writer didn't want to take on anything higher risk than a stakeholder account, and is hopeful that her child will benefit from pound-cost averaging via a tracker fund.
• Family Investments stakeholder CTF (www.familyinvestments.co.uk): This account invests in UK and overseas shares and closely follows the performance of the FTSE 100 Total Return Index, FTSE Europe Ex UK Total Return Index, FTSE Developed Asia Pacific Total Return Index and FTSE USA Total Return Index. Family Investments deducts an annual management charge of 1.5 per cent - the maximum allowed for a stakeholder CTF. Our writer says: "If it was an investment for myself, I would have blown the government voucher on some high-risk commodity trading strategy." Luckily, he was over-ruled by his wife.
STOCKBROKER CTF ACCOUNTS
Two of our writers were so peeved by the high level of charges levied on CTF funds that they opted for the self-select option. And bought bank shares, at pre-crash levels. Still, by the time their little ones reach maturity, the banking crisis will be an old story their fathers bore them with.
• Selftrade's Self-select Shares CTF (www.selftrade.co.uk) has dealing charges of 12.50 plus a flat fee of £35 plus VAT charged annually. Our writer bought some Barclays and RBS for his child.
• The Share Centre's Child Investment Account (www.share.com) has dealing charges of £7.50 plus an annual administration fee of 0.5 per cent. Our writer has "blown" his child's voucher on RBS shares.
I should also point out that there are plenty of good equity fund choices available from The Children's Mutual (www.thechildrensmutual.co.uk). The one that stands out is Neil Woodford's Invesco Perpetual Income Fund. The fund aims to achieve a reasonable level of income, together with capital growth. The fund intends to invest primarily in companies listed in the UK with the balance invested internationally. However, it isn't discounted via the CTF as it would be if you bought it via a fund supermarket, so you pay the full initial charge of 5 per cent and an annual management charge of 1.5 per cent. Kids are expensive in every way, it seems!
