Investment made simpler
Pick a platform that offers guidance and flexibility for your money
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Your support makes all the difference.Ready-made portfolios sidestep high charges and are a good option for anyone looking to take control of their assets without the guesswork, writes Emily Perryman, personal finance editor of Shares magazine.
Basket of products
Several platforms offer ready-made portfolios which correspond to the level of risk you’re willing and able to take. They are essentially baskets of investment products which spread your money across different assets and regions.
AJ Bell Youinvest has launched an online guided investment proposition containing three ready-made portfolios – Cautious, Balanced and Adventurous.
Each portfolio contains six exchange-traded funds (ETFs) which are drawn from the platform’s Top Tracker list of 16 ETFs. The products track a range of indices providing exposure to developed market and emerging market shares, property (via real estate investment trusts), gilts and corporate bonds.
What type of investor are you? Click here to find out.
Risk choice
Deciding which portfolio is most suitable comes down to your attitude to risk. If you’re conservative in your approach to investing and aren’t comfortable with the thought of losing your capital you might like the Cautious portfolio.
This aims to grow steadily over the medium- to long-term although investors are not guaranteed of getting a positive rate of return. It is predominantly comprised of bonds and gilts.
The Balanced portfolio is intended for people who want to take limited risks to get a better return than cash with some protection against large losses in periods of market volatility. Again, it is worth noting that there is no guarantee of getting a positive rate of return.
It has a mix of investment types – some equities to give the chance of share price gains and some fixed interest bonds.
The Adventurous portfolio is for those who are happy to accept a higher risk of losses in return for the chance of higher returns over a longer period, such as seven years. It is mainly invested in equity-based ETFs.
What type of investor are you? Click here to find out.
Charges
By having portfolios comprised of ETFs, as opposed to actively managed funds, AJ Bell Youinvest is able to keep the costs low – at 0.22% a year.
In monetary terms, if you have a portfolio worth £15,240 (the current ISA allowance) you would pay £33.15 a year in fees, deducted from your investments rather you having to make subsequent cash payments.
There is also an initial dealing charge of £29.70, which is the dealing fee of £4.95 multiplied by six trades for each of the ETFs that sit within the portfolio. The service is designed for lump sum investments and each ready-made portfolio requires a minimum of £4,000.
What type of investor are you? Click here to find out.
Please note the value of investments, and any income from them can go down as well as up and you may not get back your original investment. AJ Bell Youinvest do not offer advice about the suitability of their products or any investments held within them. Should you require financial advice you should consult a suitably qualified financial adviser. Tax rules can change in the future and the tax treatment depends on your personal circumstances. Past performance is not a guide to future performance and some investments need to be held for the long term.
AJ Bell is authorised and regulated by the Financial Conduct Authority. The Evening Standard is not responsible for the content of this advertisement feature and any queries should be directed to AJ Bell.
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