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Ready-made portfolio performance tables

By Clare West

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What is a ready-made portfolio?


A ready-made portfolio is a collection of funds that have been picked out by investment experts. They're sometimes called Starter Portfolios, or Smart Portfolios.

Most investment providers will offer a ready-made portfolio as an alternative to choosing your own stocks, funds and other assets to invest in. It's an easier way to invest as it doesn't huge involve amounts of research into individual companies, their growth prospects, key ratios, and other such data. Someone else, whose full-time job it is to understand these things, can do it for you.

However, the decision isn't as easy as simply choosing a ready-made portfolio option over the DIY route. That's because not all ready-made portfolios are identical.

There are several ways in which portfolios differ. Ready-made solutions can range from income portfolios with high-dividend paying stocks, to growth portfolios with the potential for companies to grow their earnings and share prices. Some have ESG (environmental, social and governance) goals. Some will be invested in more traditionally stable assets such as government bonds, while others will include more risky but potentially more fruitful assets such as corporate bonds and commercial property.

The two key areas you need to understand, however, are the portfolio's risk rating, and past fund performance. (If ESG values are important to you, then this will be an equally important consideration.)

Risk ratings


Each portfolio comes with a risk-rating. The terms used by providers may vary but, essentially, they range from higher-risk (‘adventurous') to low-risk (‘cautious'). You'll need to do a bit of work to understand what your appetite for risk is (how comfortable you feel taking risks), and what you tolerance to risk is (how much you can afford to lose), and therefore which risk rating you should be looking for in a portfolio.

In theory, the higher the risk rating, the higher the potential returns. But remember, there is no guarantee of anything. Investing is risky – investing in the most risky products means you run a higher risk of losing your entire investment.

Portfolio performance


The first thing to note sounds small-printy, but it's actually really important – past performance does not guarantee performance in the future. That means, the trends you see in the data won't necessarily continue to be replicated.

Right, so that makes all the data we're about to give you pretty useless then, yes? If we can't use the data to predict how your investments fare in the future then, what's the point? Well, no. There is still value to be gained from looking at past performance data. It can provide valuable insight into how a fund has been managed and the success or otherwise of a fund manager's strategy. So, while it isn't a guarantee, it can tell you something about the competence of those responsible for your investment growth.

Providers are obliged to make a Key Investor Information Document (KIID) available for each fund/portfolio they make available. KIIDs should include facts and figures about the fund/portfolio, including data on past performance. However, they can sometimes be tricky to track down and it's not always easy to interpret the significance of the figures on the page, as the value of performance data largely comes in comparing it to other funds' performances too. For example, 2023 might look like a terrible year for your fund. However, when compared alongside other funds, you'll notice that most funds suffered similarly. Looking at returns over the long-term, and comparing results to competitors' funds, is the best way to view the data.

The data


Below are the median average ready-made portfolio returns for the 1Y, 3Y, 5Y and 10Y periods to 31/01/2024. It incorporates 160 popular ready-made portfolios across 24 different providers.

This is our own, independently-conducted research and was not created at the request of any of the brands we include, nor have we received any payment for compiling it.

For full details of our methodology, see How we compiled the data.

To compare the performance of each brokerage/platform, click on the filter and select your desired broker(s).

Income Portfolios Performance

Income ready-made portfolios typically consist of securities that provide dividends and income, such as investment-grade bonds and dividend-paying stocks. Having said that, it’s worth noting that income portfolios offer limited upside potential compared to growth portfolios.
However, novice investors should note that these portfolios also come with fewer downside risks, making them a suitable option for investors seeking a steady stream of income and capital preservation.

Cautious & Conservative Portfolios Performance

Conservative ready-made portfolios normally invest in low-risk securities, such as a mix of investment-grade bonds, short-term government bonds, and high-quality corporate bonds. As such, the purpose of investing in these cautiously-designed portfolios is to preserve capital with the potential of beating the average inflation rate of 1-2% every year.

Novice investors should understand that conservative portfolios have limited upside potential compared to growth portfolios, however, as they are usually not invested in riskier assets like stocks. That said, they also come with fewer downside risks, making them suitable options for investors who have a lower risk tolerance.

Balanced Portfolios Performance

Balanced ready-made portfolios usually contain a mixture of bonds and stocks, or equivalent securities, thereby providing a balance between risk and return. On average, balanced portfolios have delivered returns in the mid-to-high single digits per year, on average.

Therefore, novice investors who are willing to take on a little more risk but can’t stomach heavy, double-digit losses may find balanced portfolios a more suitable option.

Aggressive & Adventurous Portfolios Performance

Aggressive and adventurous ready-made portfolios invest heavily in riskier assets like equities for the most part. Nonetheless, most of the ready-made portfolios we track tend to invest in equity ETFs to mitigate their risks. Be that as it may, platforms such as eToro’s CopyTrading™ portfolios invest in riskier, high-growth, blue-chip names such as Microsoft and NVIDIA, hence their magnanimous performance.
Ultimately, the goal for these portfolios is to maximise capital appreciation by taking on higher levels of volatility and market risk. For this reason, novice investors should be aware that these portfolios warrant a higher risk tolerance and longer-term investment horizon.

Ethical Portfolios Performance

Ethical ready-made portfolios, also known as socially responsible (SR) investing or sustainable investing, are investment portfolios that consider environmental, social, and governance (ESG) factors alongside traditional financial metrics when making investment decisions. These portfolios aim to align investors’ portfolios with their personal values, such as supporting companies that are environmentally friendly, promote diversity and inclusion, or have a positive social impact.

Novice investors should note that ethical portfolios typically consist of a mix of stocks, bonds, and other investment vehicles that meet specific ESG criteria set by the fund manager. This may include companies that are involved in renewable energy, for instance. That being said, such investment may also be more expensive and riskier than other securities. This may result in higher returns but also brings higher risks and more volatility.

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How we compiled the data


The datasets in the above graphs include the performances of 160 ready-made portfolios offered by investment platforms in the UK.

Which portfolios are selected for the dataset?

Only ready-made portfolios that are designed, marketed, and intended for beginner investors are included in the dataset.

Ready-made portfolios that are not directly managed by an exclusive platform are excluded from the data set. For example, the Vanguard UK All Share Acc. ETF is offered by Plum. However, given that it is not directly managed by Plum, and customers could reasonably access the ETF on multiple platforms, the ETF is not included for the purposes of this research.

Ready-made portfolios that have the bulk of their securities in cryptocurrencies or any other securities outside cash, bonds, and equities are excluded from the dataset.

Index-tracking funds such as those that exclusively track the S&P 500 have been excluded from the list.

What fees are included in the performance data?

The performance data quoted is net of all fees stated in each ready-made portfolio’s fact sheet. This means that fees such as the annual management fee, commission fees, and bonus fees, have already been taken out of the returns.

However, other hidden fees such as inactivity fees, platform fees, and/or foreign exchange fees have not been included.

FAQs

Of the portfolios included in our dataset, eToro has the best performing ready-made portfolios.

Generally, the riskier an investment is, the higher the potential returns. However, there are no guarantees and high risks include the risk of losing your entire investment.

Our independent research found the top performing providers to be eToro and Moneybox. HSBC, Vanguard and Willis Owen have also had relatively high returns on some of their ready-made portfolios in recent years.