Letter from the Editor: Is your ISA portfolio a top-performer?

This week, we’ve been digging into the numbers behind ready-made ISA portfolios to answer a question many investors rarely stop to ask: how well is my portfolio actually performing?

What stood out immediately is the sheer variation in returns. Even portfolios that are supposed to be working to similar goals (such as high growth, or low risk) are delivering very different outcomes, depending on how they’re constructed and who’s managing them.

In some cases, the gap in performance would have meant thousands of pounds’ difference for investors.

You can see the full results here.

So what should you do with this information?

One thing I want to make clear: it’s not simply about transferring all your money to whichever provider is currently topping the chart.

For starters, this is past performance data, and past performance doesn’t guarantee future performance.

But also, achieving optimal growth with your money is about choosing the right provider for your specific needs: some providers are well-suited to beginners, some to more advanced investors; some charge higher fees than others; some have higher levels of customer service and offer in-house advice, while others are app-only and offer only basic support.

The right portfolio for you will also largely depend on your ‘risk profile’ – that means how much risk you can afford to take, and how much risk you’re comfortable taking.

These things will make some of the portfolios in our charts more suitable for you than others.

But being able to compare performance information means you can monitor and measure your progress when you’re invested.

Monitoring performance is very important – not every week, or even every month, and certainly not every day! People who check in on their investments every day will be in for an emotional rollercoaster. Investing is meant to be a long-term journey towards your goals. And no long-term investor’s chart ever looks like a straightforward, upwards line.

As the current world events have proved, investing does not happen in a vacuum and no-one can predict precisely what is round the corner. There will be good days and bad days, shocks and bounce backs, and jumping ship every time it looks like your portfolio is having a bad day is not a smart strategy.

However, taking a long-term view by comparing the performance of your portfolio with others over several years, can provide you with important information such as how successfully it is being managed, how suited it is to your goals, and whether you’re really in the right type of fund for your risk profile.

So, if you’ve ever wondered whether your ISA is truly pulling its weight, now’s a good time to check.

You can use our free ISA performance tool here to see exactly how your ready-made portfolio or fund compares — and whether your money could be working harder elsewhere.

And if you want the full breakdown including our analysis on which providers are playing a blinder – and which have questions to answer – head over to this analysis page, where I’ve broken it down in simple terms.