Choosing your portfolio
Choosing your portfolio
We know that our customers are not all the same. For a start, you have different attitudes to risk - some of you would like to avoid losses and are prepared to accept low rates of return to achieve this, whilst others are prepared to take lots of risk in the hope that your investments grow faster.
That's why we have created 3 portfolios for you to use - each one has a different approach to investing and suits a different appetite for risk.
Plus all our portfolios are diversified to help spread the risk further. The indices and tracker funds we use are made up of a variety of underlying investments, industries and geographical areas - this means that any losses made on one underlying investment or sector should be balanced out by the performance of the others.
You are conservative in your approach to investing and are not comfortable with the thought of losing your capital. However, you are disappointed with the rates of return offered by cash savings and want your money to work a bit harder, albeit at the cost of taking on more risk. Our cautious portfolio's aim is to grow steadily over the medium to long term and provide a low but reasonably assured rate of return, without seeing large swings in value due to external factors.
The portfolio has a substantial proportion of funds that track fixed income investments or bonds and they are generally classified as low risk. When interest rates fall, the price of these investments tends to rise. However, when interest rates rise, the price of fixed interest investments tends to fall. With the potential for UK interest rates to rise in the short to medium term, this portfolio may see more price volatility than we would normally expect.
Your appetite for risk is somewhere in between cautious and adventurous - you want to take limited risks to get a better return with some protection against large losses in periods of market volatility. Our balanced portfolio has a mix of investment types- some equities to give the chance of an upside and some fixed interest bonds to limit the downside. It is designed to produce reasonable growth over 5+ years with some volatility along the way.
You are happy to accept higher risk of losses in return for the chance of higher returns over 7 years. Our adventurous portfolio may at times show losses, reflecting external events, but has a greater potential upside as well. To achieve this, the portfolio is mainly invested in equity tracker funds.
You are a confident investor with experience of researching investments. We hope that you find our tracker fund suggestions useful – they are a very cost-effective way of tracking the major global markets and asset classes.