Our fixed allocation portfolios don't try to beat the market but through diversification and low fees aim to maximise returns and lower risk. Explore below how these portfolios would have performed over the last 20 years using simulated percentage returns. Trading costs, underlying fund costs, and a management fee of 0.45% have been included.
Past performance is not a reliable indicator of future performance.
The returns are regarded as simulated and based upon an initial investment start date of 31/12/1996, up to 31/12/2016. Model returns are calculated based upon the returns of the asset class indices and do not take into account the effect of ETF tracking error. ETF products would not have been available at the initial start date. Currency hedging costs have been estimated where a hedged index has not been available. Portfolio holdings have been rebalanced to their original starting weight based upon a 6% gross error threshold. A trading cost of 0.2% has been applied to the returns when simulating a rebalance. Investment fund costs have been included based upon their current fee rate as of Jan 2017. Returns are net of a 0.45% management fee.
Balanced Aims for moderate growth without extreme volatility
Sources: hl.co.uk, pamonline.com, moneysavingexpert.com, The Guidance Gap Report, The Money Advice Service.
How we maximise the power of ETFs
The best funds
Exchange-traded funds are very popular tools used by a wide range of investors,
from institutional investors and hedge funds to pension schemes and private clients.
There are over 1800 ETFs listed for sale in the UK, from 24 different providers.
From this universe, we select the best in class funds for each asset class and automatically upgrade them whenever a better one becomes available. This process has brought the average underlying fund cost of our portfolios from 0.27% to just 0.19% annually over the past three years.
We are the first wealth manager in the UK to trade in fractional shares. This means that every £1 is put to work as efficiently as £10,000 would be, with each dividend received reinvested across your whole portfolio. Other providers trade ETFs in lots of one share, which with some ETFs costing well above £100 per share makes building a diversified portfolio difficult, even with large portfolios. Our systems, on the other hand, can hold a small fraction of a one share, effectively owning pennies in any ETF, which makes global diversification effective at any portfolio size.
The best prices
Typically, our in-house dealing team is able to buy investments at a price 0.08% lower or sell at 0.08% higher* than the market price. We make this happen in a few ways: 1) Rather than dealing on the London Stock Exchange, we deal directly with specialist ETF 'market makers' across Europe to get the best possible prices, and 2) we match deals between clients selling and clients buying to reduce trading further. These improvements add up over time: we saved our customers over £1,000,000 last year alone.
* Based on all trades conducted in 2016, this is the difference between the market quoted price at the exact time of the trade and the price we obtained.
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