COVID-19 and your child's CTF
Financial markets have been severely impacted by the coronavirus pandemic this year as concerns have risen of a global recession. As a result, you may have noticed an impact on the value of your child’s CTF.
The fund that your child’s CTF is invested in, the Halifax UK FTSE Tracking Fund, dropped 33% to its lowest point on 23rd March 2020. However, helped by unprecedented supportive action from both global central banks and governments, markets have stabilised a little and recovered some of these losses.
By the time we took over your child’s CTF on 10th April, the underlying fund had recovered from the low levels in March, by 15%. More recently, at the end of August, the value has risen a little higher from the transfer date (+5.75%), and so the drop in value of the CTF is not linked to the transfer from Halifax to us.
Events like this do not often occur, but history has shown that when volatility increases in financial markets they have usually recovered in the long term.
Our general advice is to think about the medium to long-term investment and ride out the uncertainty. Previous underlying economic conditions were strong, and whilst global economies have recently suffered from the effect of COVID-19, there is no underlying reason why financial markets should not return to their previous state.
In the past the markets have experienced bigger drops and have recovered. Volatility is one of the main reasons why investors sell at the wrong time and often fail to benefit from any potential recovery over the long-term. For more information about investing in a volatile market, read our article >
If you do have any questions our Customer Services teams are here to help and can be contacted on 0333 600 0333 lines are open Monday to Friday 8:30am to 5:00pm. If you are looking to take advantage of our face-to-face service you can meet with one of our Financial Advisers by video appointment or home visit, to discuss your options at your convenience. Request a Financial Adviser appointment >