Five things your clients will call you about this week

A warning about underperforming Child Trust Funds, dividends on the rise again, and the pros and cons of low-cost funds. Here is IFAonline's round-up of the weekend's national newspapers...

Child Trust Funds

With the upcoming launch of the first Junior ISAs, the old Child Trust Funds (CTF) may have been neglected a little. As the Sunday Telegraph reported, around six million girls and boys have CTF investments, kicked off by a £250 voucher from the government at birth.

However, it says many parents have already forgotten the plans and are not maximising their tax free allowances into the plans. Compounding this is the fact many of the CTFs appear to have delivered poor returns, meaning the children may not necessarily have a healthy pot to play with when they reach 18.

Dividend delight

It's rare to read about good news for people looking ahead towards retirement, but that's exactly what the Mail delivered with the latest on dividend payouts. It says £19bn was handed out in share dividends in the last three months, the highest level for three years.

Of course, the dividends are crucial to private pension funds, which suffered after many firms decided to hold back money with the onset of the financial crisis. However, the paper did warn the payments could plummet again if the eurozone crisis is exacerbated.

Low-cost funds

It sounds like a dream come true when looking for a managed fund: low costs yet high returns. The Independent of Sunday had a close look at low-cost active funds and explained how, rather than looking for soaring returns, they target steady and consistent growth.

Often seeking to beat the market by around 1%, they will never match the returns of well-known managers such as Richard Buxton or Anthony Bolton, but they could provide an alternative to ETFs and trackers. Of course, like any active fund, they could also underperform against the market.

Shares v Property

Shares or property. It's an age-old debate when it comes to deciding on what to invest in, and it seems the former is winning at the moment. According to the Daily Mail, share prices have risen at 12 times the rate of property values since the spring of 2009.

Despite the impact of the eurozone debt crisis on stock markets and continuing volatility, it also reported the trend is likely to continue, with investors benefiting from share dividends which as "comfortably higher than rental profits".

Investing in banks

Banking stocks have taken a battering in recent years and the eurozone and US debt crises have only made things worse, so the Sunday Express asked whether now is the time to invest in them.

Through its conversations with some experts, the consensus appears to be that Lloyds and RBS, the banks in which the government has large or majority stakes, should be avoided. However, Barclays fared batter through the crisis and has restored its dividend, while HSBC could benefit from its emerging markets exposure.