How did popular investments do in 2020?
With 2020 behind us, our interactive investment tracker revealed how 6 popular types of investments fared after £1,000 was invested in them at the beginning of the year*.
Bitcoin
Other than a slight dip in March, Bitcoin has led the way for most of the year, pulling away from the other investments from October onwards. As of 31 December, Bitcoin was up 292%, meaning a £1,000 stake at the beginning of January would be worth a massive £3,919 at the end of 2020. This is £2,953 higher than the average return of all the other 5 investments.
Gold
The uncertainty in the markets has helped propel the price of gold higher by 21% in 2020, with a £1,000 investment at the start of the year being worth £1,210. This makes gold the second-best tracked investment in 2020. It was also one of the few investments whose value never fell below its price at the beginning of 2020.
Fundsmith Equity
The UK’s most popular fund in 2019, Fundsmith Equity, hit lows in March and April when it was around 10% down and sat in sixth place in the challenge. However, the fund bounced back impressively with an 18% increase in the initial investment by the end of 2020. This makes the fund the third-best tracked investment and 1 of only 3 investments that made a profit over the year.
Savings account
The savings account gave consistent, albeit small, returns and despite briefly giving the third-best returns during the initial market crash in March, it ended the year in fourth place. While money is protected with this option, the modest return of £17 in 2020 has started to be overtaken by some of the other investment options. Also, the market-leading 1.6% interest rate available at the beginning of January is not available anymore, having been slashed throughout 2020. This means the returns are likely to be even lower in 2021.
Lloyd’s Bank
Lloyd’s Bank was the UK’s most bought stock of 2019 but gave the worst returns of all the options at the end of 2020. The bank’s share price has fallen by a huge 42% since the beginning of the year. This means that had you invested £1,000 in Lloyds shares at the start of 2020, you’d be left with just £583 at the end of the year.
FTSE 100
Putting money into an FTSE 100 tracker (or index fund) is generally considered to be a sound long-term investment, but even this hasn’t been immune to the 2020 COVID-19 downturn with it sitting second last in the list. It was down 14% at the end of 2020, with the initial £1,000 worth only £857.
This means that, while it isn’t considered to be a serious investment option, putting the £1,000 under your mattress would have left you with significantly more cash than if you had put your money into some of these traditional investments in 2020.
For the individual company share and fund, we selected the most popular choices in 2019 according to IG and Hargreaves Lansdown. For the savings account, we picked the most competitive rate available on our site as of March 2020. To replicate playing the lottery every week, we are randomising the numbers before each weekly draw.
All data is taken from the markets at the close of markets on a Friday.
*The £1,000 hasn’t actually been saved or invested in these methods, it is just being used as a way to illustrate the performance of each method.
