As Q4 begins, research by personal finance comparison site Finder reveals how nine popular types of investments have fared after £1,000 was invested in them at the beginning of the year – and surprisingly, putting money under your mattress is currently proving to be a much better “investment” than either the FTSE or the UK’s most popular stock – Lloyds.
Lloyd’s Bank was the UK’s most bought stock of 2019 but was giving the worst returns of all the options at the end of Q3. The bank’s share price has fallen by an astonishing 57.8% since the beginning of the year. This means that had you invested £1,000 in Lloyds shares at the start of 2020, you’d have had just £422 at the beginning of October.
Putting money into a FTSE 100 tracker (or index fund) is generally considered to be a sound long-term investment, but even this hasn’t been immune to the COVID downturn, and sits second bottom in the list. It was down 22.2% at the end of Q3, with the initial £1,000 worth only £778.
This means that – while it isn’t considered to be a serious investment option – putting the £1,000 under your mattress would have left you with significantly more cash than if you had put your money into these traditional investments.
The current frontrunner of the investment challenge, created by personal finance comparison site, finder.com, continues to be Bitcoin. The cryptocurrency has out-performed the other eight options for most of the year and it is currently over 50% higher than at the start of 2020, leaving the initial £1k investment at an impressive £1,546 at the end of Q3. However, crypto remains particularly volatile, as highlighted back in March when the price of bitcoin dropped 34% in a week.
Gold is giving the second-best returns, with prices rising as a result of consumers looking for safer ways to invest their money while COVID uncertainty affects the markets. A popular “safe haven” investment, the price of gold was up 28.2% at the beginning of October, which means the original £1k investment was worth £1,282 in the challenge.
The UK’s most popular fund in 2019, Fundsmith Equity, has also bounced back impressively from its lows of March and April where it was around 10% down and sat in 6th place in the challenge. It is now 3rd, with a 13.6% increase, meaning the £1k invested was worth £1,136 at the end of September.
The savings account is a consistent returner and despite briefly giving the 3rd best returns during the initial market crash in March, it now sits in 5th place. While the money is safe with this option, the modest return of £12.45 has started to be overtaken by some of the other investment options. The market-leading 1.6% interest rate available at the beginning of January is also not available anymore, having fallen to 1.18%.