The child trust fund (CTF), based on the £1.25bn Witan Investment Trust, offers the potential for strong growth through a globally diversified equity portfolio run by carefully selected fund managers from around the world.

The 18-year horizon of CTFs makes them particularly suitable for equity investment. Historically, equities have generally outperformed other major asset classes over the long term and, over the last five years, Witan’s total return has been 97.1 per cent, compared with a typical return from cash savings of 13.1 per cent.

The Jump CTF offers the potential for positive returns within a balanced, low-risk, low-cost, investment vehicle.

Parents can invest the £250 vouchers received both at their baby’s birth and on turning seven in the Jump CTF and additional investments, to a maximum of £1,200 per annum, can be made by parents, family or friends.

Jump offers the flexibility of regular monthly payments from £25 to £100 or minimum lump sums of £50. Dividends paid by Witan will also be reinvested into the CTF and all contributions are exempt from income and capital gains tax.

The product complements the existing Jump Savings Plan for those with children not eligible for the Child Trust Fund or wishing to invest more than the annual £1,200 CTF limit. Minimum monthly investment is £25 (£100 for lump sums).

James Budden, Witan Investment Services managing director, says, ‘The government has made efforts to encourage parents to put money aside for their children’s future and the introduction of the CTF has helped position saving for children at the heart of a family’s financial planning. This has led to a significant increase in interest in child savings schemes and we currently manage around £60m on behalf of some 20,000 children through our existing Jump Savings Plan.

‘However, there is currently a paucity of options for parents seeking a share-based vehicle for their child’s CTF. With the new Jump Child Trust Fund, the £250 can go to work from the outset, capturing the excellent long-term growth prospects offered by Witan’s globally diversified, multi-managed equity portfolio.’