Interactive Investor

Two short-term growth Model Portfolios

2nd March 2017 13:28

Marina Gerner from interactive investor

Over the past 15 months we have been looking in more depth at individual Model Portfolios, assessing their aims, the type of investor they might suit and how they can be used. Our last two portfolios to be given the once-over are Echo and Alpha.

The Model Portfolios are a collection of 12 theoretical investment portfolios, each consisting of six or seven funds and trusts and designed to meet different investment objectives and suit different risk profiles and timeframes.

Over the past year (to 10 February), Echo has returned 30.5%. The portfolio is designed for investors with a higher-risk profile and aims to deliver growth over the medium-term.

Echo Model Portfolio

It has HSBC FTSE All-Share Index at the base of the portfolio, which provides investors with broad exposure to UK companies of all sizes. It is complemented by the actively managed CF Miton UK Value Opportunities, which focuses on undervalued companies.

To top it off, there is a holding in Stewart Investors Asia Pacific Leaders.

This model portfolio could suit investors who wish to accumulate a nest egg for grandchildren through a Junior ISA, or those in their early 50s with adequate pension provision, who want to grow extra savings for their retirement in an ISA.

Echo has returned 8% over three months and 21.5% over three years.

Disappointing performance from some of the funds chosen when the fund launched in 2012, continues to weigh down the three-year performance figure somewhat.

Alpha Model Portfolio

Meanwhile, the Alpha portfolio has returned 22.4% over one year. It is suitable for medium-risk investors looking to grow their capital over at least five to 10 years.

With the aim of protecting investors from excessive volatility, this portfolio has three core holdings.

Each invests in a mixture of bonds and equities: Artemis Monthly Distribution, Fidelity Moneybuilder Balanced and Royal London Sustainable Diversified Trust. Bonds tend to fluctuate less in value than shares, while the equity exposure in these funds provides growth potential.

The managers of these two funds are highly experienced and focus on well-established companies that are leaders in their fields.

This fairly steady portfolio may suit parents investing to pay for the education of a young child, or maybe young investors building a deposit for house purchase. Alpha has returned 4.2% over three months and 35.2% over the last three years.

All of the Model Portfolios on our sister website Money Observer can be bought through Interactive Investor, for a flat fee of just £10 each. This represents a £40 saving on the standard charge of £10 per fund purchase.

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.

This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. 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.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Related Categories