A Starter’s Portfolio
Disclaimer
This article is for general information and educational purposes only. It does not constitute investment advice, a personal recommendation, or a financial promotion within the meaning of the Financial Services and Markets Act 2000
Readers should make their own independent assessment and where appropriate seek advice from an FCA authorised advisor.
In the ‘Getting started’ module 6 of our Investing Foundation Course we covered how to set up your first Investment Portfolio. Here we examine how to construct a simple first fund portfolio.
Why Funds
For many investors professionally managed funds provide more diversity with less outlay than investing in individual shares.
Monthly investing
Your platform provider should have a monthly direct debit facility whereby you can purchase £25 of each of your chosen funds each month.
Ad hoc Investing
You can also purchase a minimum of £100 of any fund over a period that suits your finances. You will be investing for several years and will need to get used to the daily price changes of any funds you own but will gain confidence as your portfolio gains in size and value over time.
Two simple starting approaches
I have set out below two ways you can start your Investment Journey at minimum cost.
1. The lowest cost. Investment £100 – £200.
Pick one or two Global Equity Funds. These will give you the widest spread of sectors and companies and will contain some Tech exposure.
2. Add a Tech fund with an additional £100 investment.
Tech, supported by AI related investment, has been one of the strongest performing sectors over the past year. The easiest way to get into this is to purchase a Tech tracker fund such as the one listed below.
However, this period of rapid growth in Tech companies can be followed by periods of greater volatility.
Follow up!
With more confidence and experience, some investors may later consider adding Asian and US regional funds.
The funds below will give you global coverage and have a proven record over the last five years, and this last year.
They will fit into any tax-free investment vehicle – Stocks and Shares ISA, Junior ISA, or SIPP.
Funds having ‘Index’ in their name track the appropriate Index.
Example. Selection of Equity Fund’s price performance over 1 year and 5 years
Note. Performance figures below are the approximate cumulative returns to May 26 based on platform providers data.
| 1 Yr | 5 Yrs | |
| Asia Equity Funds | ||
| Jupiter Asian Income 1 Inc. | +55% | +111% |
| Legal & General Pacific Index C Inc. | +86% | +111% |
| Global Equity Income Funds | ||
| Artemis Gbl. Inc 1 Inc. | +53% | +166% |
| Royal London Gbl. Equity Inc M Inc. | +34% | +110% |
| Vanguard Gbl. Equity Inc A Inc. | +28% | +89% |
| US Equity Funds | ||
| Fidelity Index US P Acc. | +28% | +100% |
| Blackrock US Dynamic D Inc. | +48% | +116% |
| Tech Equity Funds | ||
| Legal & General Gbl. Tech Index C Acc. | +57% | +186% |
| Polar Capital Gbl. Tech 1 GBP | +139% | +255% |
| CT (Lux) Gbl. Tech ZG GBP | +103% | +211% |
Note. The powerful performance of funds in this sector can be followed by periods of weaker returns.
Important Considerations
- Investments can fall as well as rise.
- Different sectors perform well at various times.
- Past performance is not a guide to future returns.
- Investing regularly can help smooth out volatility over time.
So Happy investing and let me know you get on via our contact