After repeatedly watching your children shrieking with delight as they open Santa’s presents, only to see them discarded days later when the novelty wears off, many parents and grandparents might want to consider a gift that has a longer lasting impact.
Rather than slipping a fiver into a Christmas card, a contribution into an investment trust has the potential to be life-changing. Certainly, the children will be thanking you for it long after they’ve discarded that mini drone kit they’d been begging for.
If a parent or grandparent had invested a one-off £1,000 in the average investment trust for a child 18 years ago, it would now be worth £4,600, equivalent to an annualised return of 8.8%. However, if they had made investments of £50 a month instead, their total investment of £10,800 over 18 years would have trebled and now be worth an impressive £33,838. A hefty pot that could help with a deposit on a first home, further education costs or buying a car.
The top performing investment trust sector over the last 18 years is Technology & Technology Innovation, with a total return of £19,493 for every £1,000 invested. This is followed by Biotechnology & Healthcare (£10,287), North America (£6,451), and Asia Pacific Smaller Companies (£6,340).
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “With ever increasing financial demands on young people, parents and grandparents could consider making an investment to give their child a financial leg up. A modest amount invested now could help with buying a car, a deposit for a first home or university tuition fees.
“Investment trusts are known for delivering strong performance, benefiting from the growth potential of the stock market over long periods. Through a diversified portfolio of investments, they provide a way to spread investment risk. Investing as little as £50 a month into the average investment trust over the past 18 years would have grown to over £33,000. That’s a sizeable contribution to set up a young person for the future. Saving within a Junior ISA is the best way to ensure that any income and capital gains remain tax-free even after your child turns 18.”
Monthly investing in investment trusts
| £50 monthly investment over the past 10 years | £50 monthly investment over the past 18 years | |
| Sum invested | £6,000 | £10,800 |
| Average investment trust return | £9,923 | £33,838 |
Lump sum investment in investment trusts
| £1,000 lump sum investment 10 years ago | £1,000 lump sum investment 18 years ago | |
| Sum invested | £1,000 | £1,000 |
| Average investment trust return | £2,831 | £4,600 |
Source: theaic.co.uk / Morningstar (to 30/11/25). Average investment trust return excludes VCTs. Amounts rounded to nearest pound.
For more information on saving for children with investment trusts, read our guide ‘Saving for children’ on theaic.co.uk.
