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It's strange - in many cases, parents and grandparents who have enjoyed the rewards of long term equity investment then give their children/grandchildren a building society savings account as a long term investment. Is that sensible?

Why not give them the benefit of some capital growth?

We have designed portfolios for gifts of between 1,000 and 50,000. The objective is to provide sensible exposure to the markets, starting with the backbone of an Equity Income Fund. Clearly, it may be 10, 15 or even 20 years before the proceeds are required and market conditions and fund managers will change during that period. When they do, you will be able to switch funds within the child's portfolio for an initial charge of just 0.25%


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Questions & Answers

How much can I give away?
You can gift 3,000 each year within your annual gift exemption - and perhaps more if the gift is clearly out of income. You can actually give away as much as you like, though there may be an eventual Inheritance Tax liability if you die within 7 years of making the gift.

What is the tax position?
Children have the same Income Tax and Capital Gains Tax allowances as adults - so why not utilise them? However, if a parent gifts the investment and that investment produces income of more than 100 per year, the income and realised capital gains will be taxed as if it were the parent's until the child reaches 18. This does not apply to gifts from grandparents or investments in pensions.

Whose name will the investment be in?
The investment is made in the name of an adult(s) i.e. parents or grandparents and designated for the benefit of the child or children. The "Account Designation" (normally the child's initials) is entered on the application form in the space titled A/c Designation (if any).

When will the child have access to the investment?
Children cannot deal in unit trusts until they are 18 years old. For pensions, the current age is 55.

How do I invest?
For fund investments click on the button above and complete the application (either the parent or grandparent, as appropriate) remembering to insert the "A/C Designation". Decide where you wish to invest and enter the name of each fund and the investment amount. Unless you want to receive income, leave the next section blank. Finally, sign the application and return it to Garrison with your cheque made payable to "Cofunds Ltd - re - [your name]".

The Funds

Artemis Income
The fund has been managed by Adrian Frost since January 2002. Adrian previously managed the award winning Deutsche UK Equity Income Fund for 12 years. The objective of the fund is to produce a rising income with capital growth. The portfolio will primarily hold investments in the UK including ordinary shares, convertibles and fixed interest securities. The fund has been awarded an AAA status by both Citywire and Forsyth-OBSR.

Jupiter Merlin Worldwide Portfolio
The objective of the fund is to achieve long-term capital growth. It is a "fund of Funds", which means that the manager can invest in any of the 2000+ investment funds which are available in the UK. The portfolio is managed by a specialist team headed by John Chatfeild-Roberts. The breadth of Jupiter's expertise has been recognised by their award of the Investment Week 2005 Global Group of the Year. The Fund has a 5 star and AA rating from S&P and AAA rating from Forsyth-OBSR. Each of the managers is individually AA rated by Citywire.

M&G Recovery
The M&G Recovery Fund is probably the original "Special Situations" fund, as it has delivered over 16% average growth a year for the past 36 years. It focuses on out of favour companies where good management teams are making concerted efforts to turn the business around. Holdings are sold when the market has re-rated the stock and the recovery process is complete. The manager Tom Dobell is A rated by Citywire and the fund is AA rated by S&P and Forsyth-OBSR

New Star Property
This fund invests in commercial property - and unlike domestic property, commercial property has not been troubled by extreme valuations. New Star believe that the outlook for the sector remains strong. Commercial property is an essential part of any well balanced portfolio. It tends not to experience the gyrations typical of the domestic "buy to let" market. By contrast, it usually provides a steady income from rental yields, as well as capital valuations that have risen at least as fast as inflation over the longer term.

InvescoPerpetual Distribution
The fund's objective is to provide a sustainable level of monthly income, with the prospect of capital growth over the long term. About 65% of the portfolio is invested in corporate bonds and other fixed interest securities, with the remainder invested in high yielding equities. The fixed interest element will not fall below 60% - which brings significant tax advantages. The Fund is managed by Neil Woodford, Paul Read and Paul Causer. It has been awarded an AA rating from S&P and an AAA rating from Citywire

Neptune Income
Robin Geffen, who has managed this fund since inception, founded Neptune in 2002. With over 20 years experience, Robin aims to provide high income from a managed portfolio which mainly invests in UK equities and fixed interest securities, although there will be a small exposure to international stocks. The fund is A rated by Forsyth-OBSR.

Investec Global Free Enterprise
Managed by Mark Breedon, this fund aims to achieve long term capital growth through investment in privatised companies around the globe. He also invests in other companies expected to benefit from privatisation, deregulation or de-mutualisation. He believes that this strategy offers above average opportunities for capital gain. The fund is AA rated by both S&P and Forsyth-OBSR.

POPULAR FUNDS
InvescoPerpetual High Inc
Artemis European
New Star Property
JPM Japan
Framlington Monthly Inc
Artemis Income
Framlington UK Sel Opps
Jupiter Income
Rathbone Income
Jupiter M Worldwide
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