Consumers who avoid paying an initial charge on a product could actually earn more than the origi...
Consumers who avoid paying an initial charge on a product could actually earn more than the original sum invested if they put that money into an investment product, according to a new survey.
Research commissioned by Virginmoney and conducted by Lipper Reuter looks into the long-term effects of initial charges on unit trusts and Isas between 1999 and 2001 and suggests that the average initial charge of £39.40 would have exceeded the original £1,000 investment in less than 20 years, had it been invested.
Virginmoney goes further to suggest that the difference between buying an outperforming rather than an underperforming fund is subject to paying an initial charge, and that had investors avoided paying initial charges over the past five to 10 years and reinvested gross income, they would have increased their chances of beating the FTSE All-Share Index by 50%.
Virginmoney adds that the average initial charge of 3.94% is greater than any daily fall in the UK's FTSE All-Share Index over the past 10 years.
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