Shares trounce cash by £6,400 since the crisis

While rates were cut, stocks had decade long rally

SAVERS who have left their money languishing in lowinterest rate current accounts since the financial crisis have missed out on more than £6,400 of potential returns, figures show. Number crunching from Fidelity International has shown that a sum of £10,000 invested in the average UK savings account at the start of the crisis would now be worth just £10,461.

The £461 return pales in comparison to the money made by the UK stock market – £10,000 invested in the FTSE All-Share index at the beginning of the crisis would now be worth £16,846, a whopping £6,846 return.

Those who have failed to make their money work for them have been punished by miniscule returns at high street banks, which have been unable to reward investors’ loyalty due to 10 years of record-low interest rates.

Meanwhile, UK markets have pushed through the stock market crash in late 2008, the eurozone crisis, and political risk events of the last ten years such as last year’s Brexit vote, to sit near record highs at present.

The benefit of investing in companies over time becomes even clearer when one takes a look at the performance of different parts of the UK stock market since the financial crisis.

The MSCI UK IT index, which shows the average performance of IT companies in the UK, has returned an impressive 280.5pc since July 2007.

To put it another way, a £10,000 investment in UK technology firms over the last ten years could now be worth £38,050.

Using a similar methodology, the UK consumer staples sector has returned 183.6pc since the crisis, while healthcare firms have returned 150.3pc and telecommunications companies have returned 88.4pc.

But with UK financials losing investors 12.7pc and material firms returning just 3.5pc over the period, a sector-by- sector analysis of the UK market also shows how important it is to diversify investments.

Tom Stevenson, investment director for personal investing at Fidelity International, said: ‘The dispersion of returns over the past ten years makes another strong case for holding a welldiversified portfolio.

‘Spotting the winners and losers ahead of time is no sim- ple matter and putting your eggs in a variety of baskets is the best way to ensure that you gain exposure to the sectors and asset classes that do end up delivering.’

Although the UK market has been strong and warrants consideration by savers, Fidelity’s research also shows that UK companies have in fact offered some of the weakest returns globally over the last decade, averaging 68.5pc.

In comparison, Japanese firms have made 77.8pc, European companies have returned 77.8pc, businesses in emerging markets have made 92.9pc, and US firms have delivered a whopping 209.2pc return.

Indeed, the average return for companies across the world since the crisis is 134.7pc. The strong performance of US companies is perhaps unsurprising due to the country’s quick response to the crisis.

However, the outstanding performance of firms in Europe – which has struggled to generate growth – and emerging markets – which have been hit by Donald Trump’s aggressive foreign policies – may surprise some.

Stevenson said: ‘What jumps out for me is the benefit of a balanced portfolio. While there have been some years when every single asset class has risen, and some where there was a mixture of risers and fallers, there hasn’t been a single year where everything has fallen together.

‘This is really good news for a hands- off, long-term investor because it shows that diversification works.

‘ It’s a compelling case for putting together a well-balanced portfolio and simply holding it for the long term.’