How we choose our investments

How we choose our investments"

How we choose our investments

Indices explained

For each market or asset class we include in our portfolios we identify a tracker fund as a cost-effective means of tracking it.

In most cases the tracker fund will look to mirror and provide the performance of an underlying index.

A financial index is a measurement of the value of a section of the stock market – in other words, an index measures the investment performance of a specific market or asset class.

For example the FTSE 100 in the UK contains the largest 100 companies by market capitalisation listed on the Main Market of the London Stock Exchange. By buying a tracker which follows this index, you indirectly own all of the largest 100 companies that make up the index.

A tracker fund provides instant and really low-cost access to a diversified investment portfolio.

The top tracker list and portfolios

To help you build a portfolio that is properly balanced between risk and return, we have prepared a list of top trackers from which you can choose.

The idea is to provide a good mix between relatively low-risk, low-return and relatively higher-risk, higher-return assets.

In all cases, the asset classes and instruments are proposed on a medium to long term basis, by which we mean three to seven years – or more.

We have then used 3 broad risk appetite categories – cautious, balanced and adventurous – and designed 3 portfolio allocations using our funds from our top tracker list.

Our trackers

All of the trackers on our top tracker list must meet the following criteria:

  • They are listed on the London Stock Exchange
  • They are priced in pounds sterling
  • They are compliant with European Union regulations known as UCITS
  • They have assets of more than £75 million under management
  • They are one of the cheapest options which meet these criteria, using the Ongoing Charge Figure (OCF) as the measure. The OCF is the investing industry’s standard measure of fund running costs and you can find it on the portfolio and build your own pages

The portfolios are designed to feature investments which are eligible for ISAs and SIPPs, regulated by the Financial Conduct Authority, are transparent and have good disclosure of how they work and what they contain. The tracker funds must also be liquid and easy to trade in normal market conditions.

Ready-made portfolios

Invest in the AJ Bell Youinvest cautious portfolio

Cautious portfolio

This portfolio aims to give a steady total return over time.

Try our cautious portfolio
Invest in the AJ Bell Youinvest balanced portfolio

Balanced portfolio

This portfolio aims for growth and income through taking some risk without extreme volatility.

Try our balanced portfolio
Invest in the AJ Bell Youinvest adventurous portfolio

Adventurous portfolio

This portfolio aims for higher growth by accepting higher volatility.

Try our adventurous portfolio
Build your own portfolio using the AJ Bell Youinvest investment guidance

Build your own portfolio

This tool lets you create your own portfolio from our top tracker list.

Try our build your own portfolio