Interactive Investor

A short-term growth portfolio for higher-risk investors

17th June 2016 14:11

Marina Gerner from interactive investor

In this article we home in on one of our sister magazine's Money Observer's Model Portfolios, assessing its aims, the type of investor it may suit and how it's performed. This time we focus on Delta: short-term growth, high risk.

What are the Money Observer Model Portfolios?

The Money Observer Model Portfolios are a collection of 12 theoretical investment portfolios, each consisting of a selection of six or seven funds and investment trusts (predominantly Money Observer Rated Funds). They are designed to meet particular investment objectives, starting with income and growth.

The six income and six growth packages are each tailored to different time horizons and risk profiles (medium risk or higher risk) by combining funds invested in different regions, sectors and asset classes.

What are Delta's aims?

Delta is predominantly an equity portfolio whose objective is to produce capital growth in the short term (five to nine years). It takes on a relatively high level of risk.

Delta contains four active funds, one passive fund and one investment trust: Fundsmith Equity, Kames Ethical Cautious Managed, Rathbone Income, Stewart Investors Asia Pacific Leaders, HSBC FTSE All Share Index and Witan investment trust.

Three funds with different approaches provide this portfolio with a good foundation of UK-focused investments.

Kames Ethical Cautious Managed invests in a mixture of UK bonds and equities. The HSBC FTSE All Share Index fund provides additional broad exposure to UK companies of all sizes.

Rathbone Income is actively managed with the aim of providing steady income and growth. In addition, there are three internationally focused holdings: Fundsmith Equity, Witan and Stewart Investors Asia Pacific Leaders.

For whom is it designed?

Delta is designed for people with relatively short investment timescales of five to nine years, who are looking to grow their capital, and who have other secure savings and can afford to lose a significant portion of this capital under a worst-case scenario.

It may suit investors who wish to accumulate an extra nest egg in an ISA but are unsure about when the capital will be required.

Investors approaching retirement, who already have ample pension provision but want to build up some extra savings, may also wish to consider this portfolio.

How has it performed?

Delta has returned 18.5% over the past three years to the end of April, well up on the FTSE WMA Stock Market Growth index return of 14.6%.

An initial investment of £10,000 three years ago would be worth £11,850 today. Over the past year it lost 1.4%, compared to a loss of 3% from the FTSE WMA Stock Market Growth index.

  

This article was originally published by our sister magazine Money Observer here.

 

 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser