FIRST 50 FUNDS

20 cheap trackers to use as core holdings

INSTANT PORTFOLIOS
Vanguard LifeStrategy 20% Equity Inc or Acc
This low-risk fund provides some upside potential from investing while limiting the risk of
losing your money. It has 20% exposure to globally diversified equities with the remainder
in globally diversified government and corporate bonds. The underlying portfolios are
wholly made up of Vanguard index tracker funds. For a bit more risk, use the 40% equity
version.
OCF: 0.22%
ISIN – Inc: GB00B4620290
Acc: GB00B4NXY349

Vanguard LifeStrategy 60% Equity Fund Inc or Acc

This instant, medium-risk portfolio has 60% exposure to globally diversified shares with
the rest in globally diversified government and corporate bonds.
OCF: 0.22%
ISIN – Inc: GB00B4R2F348
Acc: GB00B3TYHH97

Vanguard LifeStrategy 100% Equity Fund Inc or Acc

This one-stop fund is aimed at higher-risk investors, who don’t want to think about how
to put a portfolio together. The main stock market exposure is to US company shares,
followed by UK shares. To reduce risk, go for the 80% version.
OCF: 0.22%
ISIN – Inc: GB00B545NX97
Acc: GB00B41XG308

UK SHARES
iShares 100 UK Equity Fund D Acc
By tracking performance of the FTSE 100 Index of the biggest companies traded on the
London Stock Exchange, it seeks to achieve capital growth. Dividends are paid quarterly.
OCF: 0.07%
ISIN – GB00B7W4GQ69

L&G UK Index Trust C Dist or I Acc

It aims to provide growth by replicating performance of the FTSE All Share Index. This
index represents 98% of companies traded on the London Stock Exchange. The fund will
invest almost entirely in company shares but may use derivatives (contracts which have a
value linked to the price of another asset) to help with efficient day-to-day management or
to reduce some of the risks of the market.
OCF: 0.1%
ISIN – C Dist: GB00BG0QPH16
Acc: GB00B0CNGN12

Vanguard FTSE 250 UCITS ETF

This Exchange Traded Fund aims to provide long-term capital growth by matching the
return of the FTSE 250 index, which represents medium-sized companies on the London
Stock Exchange.
OCF: 0.1%
ISIN – IE00BKX55Q28

Vanguard FTSE UK Equity Income Index Inc or Acc

Offering low-cost, diversified access to higher income UK shares, it tracks performance of
the FTSE UK Equity Income Index, made up of the highest dividend-paying shares among
the largest 350 companies on the London Stock Exchange.
OCF: 0.22%
ISIN – Inc: GB00B5B74684
Acc: GB00B59G4H82

OVERSEAS SHARES
Fidelity Index World Fund P Inc or Acc
A good fund to start a portfolio with, it tracks performance of the MSCI World Net Return
Index of large- and medium-sized companies from more than 12 developed countries,
including the UK.
OCF: 0.12%
ISIN – Inc: GB00BP8RYB62
Acc: GB00BJS8SJ34

L&G International Index Trust I Inc or Acc

Tracking performance of the FTSE World (ex UK) Index, which has a broad spread of
company shares from developed and emerging markets globally (excluding UK companies).
Note that it includes emerging markets countries, so it might be a bit riskier than the
Fidelity Fund.
OCF: 0.13%
ISIN – Inc: GB00B2Q6HX78
Acc: GB00B2Q6HW61

Vanguard FTSE Developed Europe ex-UK Equity Index Inc or Acc

Good for instant exposure to developed countries in Europe, excluding the UK. Its main
exposure is to French, German and Swiss companies.
OCF: 0.12%
ISIN – Inc: GB00B5B74N55
Acc: GB00B5B71H80

HIGHER-RISK OVERSEAS SHARES

Vanguard Global Small Cap Index Fund Inc or Acc
It tracks performance of the MSCI World Small Cap Index of smaller companies in
developed countries.
OCF: 0.38%
ISIN – Inc: IE00B3X1LS57
Acc: IE00B3X1NT05

Fidelity Index Emerging Markets P Inc or Acc

It aims to achieve long-term capital growth by closely matching performance of the MSCI
Emerging Markets Index of rapidly developing economies.
OCF: 0.2%
ISIN – Inc: GB00BP8RYT47
Acc: GB00BHZK8D21

US SHARES
HSBC American Index C Inc or Acc
Seeking long-term capital growth, it matches the return of the S&P 500 Index of 500 large
companies listed on the New York Stock Exchange or NASDAQ (another American stock
exchange).
OCF: 0.06%
ISIN – Inc: GB00B80QG490
Acc: GB00B80QG615
Vanguard US Equity Index Fund Inc or Acc
This is a very cheap one-stop solution for access to the whole US equity market. This tracks
performance of the S&P Total Market index, which has nearly 3,800 constituents. It holds
smaller companies as well as large and medium-sized companies.
OCF: 0.1%
ISIN – Inc: GB00B5B74S01
Acc: GB00B5B71Q71

JAPAN SHARES
HSBC Japan Index Fund Inc or Acc
This seeks to track the FTSE Japan index by investing in all 494 large and medium-sized
companies in the index.
OCF: 0.21%
ISIN – Inc: GB00B80QGM70
Acc: GB00B80QGN87

BONDS
Vanguard Uk Government Bond Index Inc or Acc
This fund can be used to achieve lower-risk diversity from an equity portfolio. It seeks
to provide returns consistent with the performance of a market-weighted bond index of UK
government fixed-income securities denominated in Pound Sterling.
OCF 0.15%
ISIN – Inc: IE00B1S75820
Acc: IE00B1S75374

Legal & General Short Dated Sterling Corporate Bond Index I Inc or Acc
Holds Sterling-denominated bonds from around the world but mainly from the UK. It
consists mainly large, corporate investment-grade bond issues with maturities of between
one and five years (the safer end of the maturity spectrum because interest rate changes
will have less of an effect on the outcome to the investor).
OCF: 0.14%
ISIN – Inc: GB00BKGR3G14
Acc: GB00BKGR3H21

iShares Overseas Corporate Bond Tracker Fund D Inc or Acc

This fund gives you exposure to corporate bonds worldwide and sits nicely alongside the
L&G Short Dated Sterling Corporate Bond fund. It provides exposure to the global market of
investment-grade corporate bonds excluding those issued in pounds.
OCF: 0.16%
ISIN – Inc: GB00BNB74B95
Acc: GB00B58YKH53

Vanguard Global Bond Index GBP Hedged Inc or Acc

This highly diversified fund gives exposure to more than 7,300 bonds with the US, Japan,
Canada, France and Germany being the highest weighted countries. Investors can use it as a
‘one-stop shop’ for developed market investment-grade-rated fixed-income exposure. The
fund is currency hedged into Sterling, which takes out the currency volatility for UK
investors, which we think is a good feature for a beginner.
OCF: 0.15%
ISIN – Inc: IE00B2RHVP93
Acc: IE00B50W2R13

GOLD
iShares Physical Gold ETC (SGLN)
Gold tends to make a good diversifier in a portfolio as it behaves differently to other asset
classes and tends to rally while other assets are falling. This fund is an exchange traded
commodity (ETC) rather than a traditional index tracker fund. However, it is traded on the
London Stock Exchange and you can buy it through most investment platforms.

Think of it like buying gold bars without the hassle of having to store your gold. The fund
provides investors with the performance of the daily spot price of gold and physically
invests in the metal in the same proportion of the value of the ETC. It doesn’t provide an
income.
OCF: 0.25%
ISIN – IE00B4ND3602

20 active funds to add value

UK STOCK MARKET INCOME

Franklin UK Rising Dividends W Acc

This fund aims to beat the FTSE All-Share index over the long term by investing in
businesses that can consistently grow their dividends. The fund has a concentrated
portfolio, typically of 40 to 50 names and focuses on firms that have increased their
dividends in at least eight of the past 10 years and have not cut their dividends over that
period.
OCF: 0.55%
ISIN – Inc: GB00BT6STC53
Acc: GB00B5MJ5601

MI Chelverton UK Equity Income B Inc or Acc

By investing in predominantly medium-sized companies, it aims to deliver a high and
growing quarterly dividend and the prospect of good long-term capital growth. It has been
a standout performer over the long term, but can be more volatile than other equity income
funds.
OCF: 0.86%
ISIN – GB00B1FD6467
Acc: GB00B1Y9J570

UK STOCK MARKET GROWTH

Merian UK Mid Cap R Inc or Acc
Formerly called Old Mutual, its aim is to provide capital growth by investing primarily in a
portfolio of medium-sized UK companies.
OCF: 0.85%
ISIN – Inc: GB00B8FC6L92
Acc: GB00B1XG9482

Marlborough UK Micro-Cap Growth Fund P Acc

Managed by Giles Hargreave and Guy Feld, it aims to provide a total return of capital and
income in excess of that achieved by the FTSE Small Cap Index (excluding investment
companies) over the medium to long term. Inc class is not available.
OCF: 0.79%
ISIN – Acc: GB00B8F8YX59

Liontrust Special Situations I Inc

An attractive offering for investors seeking an unconstrained UK equity fund, this fund has
a distinct process looking for UK companies with a strong defendable business franchise. It
invests in all sizes of companies in a relatively concentrated portfolio with low turnover.
Acc class is not available.
OCF: 0.87%
ISIN – GB00B57H4F11

GLOBAL STOCK MARKET

Fundsmith Equity I Inc or Acc
Managed by Terry Smith, it invests in equities on a global basis for the long term. It will not
adopt short-term trading strategies.
OCF: 0.95%
ISIN – Inc: GB00B4MR8G82
Acc: GB00B41YBW71
Lindsell Train Global Equity B Inc
Managers Nick Train, Michael Lindsell and James Bullock want to achieve long-term income
and capital growth by constructing a concentrated portfolio of 20 to 35 ‘exceptional’
companies from around the world. Acc class is not available.
OCF: 0.72%
ISIN – B Inc: IE00B3NS4D25

Artemis Global Income I Inc or Acc

The fund is better diversified than some global equity income funds, using its full global
remit to exploit income opportunities and keeping its UK content relatively low.
OCF: 0.82%
ISIN – Inc: GB00B5N99561
Acc: GB00B5ZX1M70

SPECIALIST OVERSEAS SHARES

Fidelity American Special Situations W Acc
This fund’s manager Angel Agudo has a contrarian approach to investing, targeting
companies suffering from specific problems that he believes will be resolved. It has been
trialling a new fee structure since April 2018 – a lower base fee and a new performance fee
linked to success in beating the market. Inc class is not available
OCF: 0.92%
ISIN – Acc: GB00B89ST706

Man GLG Continental European Growth C Professional Acc

This fund aims to achieve above average long-term capital growth through investing in
shares of companies listed on European Stock Exchanges. The manager invests in
companies that enjoy a firm leadership position that gives them excellent prospects, plus
companies that are emerging winners already enjoying clear competitive advantages. Inc
class is not available.
OCF: 0.9%
ISIN - Acc: GB00B0119487

Baillie Gifford Japanese Inc or Acc

Japan is a major developed market, and this is a sound choice for getting core Japanese
equity exposure into your portfolio. The fund seeks to identify typically 50 to 60 companies
with potential to grow over the long term. It is managed by a very experienced Japanese
equities team and has a low ongoing charge, compared to rival funds.
OCF: 0.63%
ISIN - Inc: GB0006010945
Acc: GB0006011133

Stewart Investors Asia Pacific Leaders B Inc or Acc

Its goal is to achieve long-term capital growth from a portfolio of large and medium-sized
companies in the Asia Pacific region (excluding Japan, but including Australasia).
OCF: 0.88%
ISIN – Inc: GB00B57S0V20
Acc: GB0033874768

Baillie Gifford Emerging Markets Growth B Inc or Acc

This fund’s objective is to produce attractive returns over the long term through
investment in emerging markets worldwide. China is the largest weighting at almost 30%
followed by India, South Korea and Brazil. It was a winner in the Moneywise Fund Awards
2018.
OCF: 0.78%
ISIN – Inc: GB0006020530
Acc: GB0006020647

BONDS

BlackRock Corporate Bond D Inc or Acc

A fund that invests in a wide spectrum of fixed-interest securities, mainly investment-grade
corporate bonds, which must account for at least 80% of the portfolio. It aims to maximise
returns through both capital growth and income.
OCF: 0.57%
ISIN – Inc: GB00B4T5JV79
Acc: GB00B4QC3311

Jupiter Strategic Bond I Inc or Acc

A flexible ‘go-anywhere’ bond fund that aims for a high income and capital growth by
seeking out the best fixed-income opportunities around the world.
OCF: 0.73%
ISIN – Inc: GB00B544HM32
Acc: GB00B4T6SD53

Royal London Global Bond Opportunities Z Inc or Acc

This well-diversified fund offers a high level of income as well as the opportunity for capital
growth. It focuses predominantly on credit markets internationally.
OCF: 0.5%
ISIN – Inc: IE00BYTYX230
Acc: IE00BD0NHJ71
Marlborough Global Bond P Inc or Acc
A very diversified portfolio of bonds from around the world, including the UK. A good way
to diversify bond exposure. It has almost 50 holdings – more than most comparable funds.
OCF: 0.44%
ISIN – Inc: GB00B8H7D001
Acc: GB00B6ZDFJ91

ETHICAL AND SOCIALLY RESPONSIBLE INVESTMENT

Royal London Sustainable World Trust C Inc or Acc
The core aim of this fund is to invest in innovative companies having a positive impact on
society. It also invests in companies showing leadership in environmental, social and
governance (ESG) management. There tends to be a bias towards the US and developed
markets because that is where the manager tends to find innovation and companies with
the strongest ESG standards.
OCF: 0.77%
ISIN – Inc: GB00B8GG6326
Acc: GB00B882H241

Rathbone Ethical Bond

It has a higher income target than other bond funds and has a very good performance
record. The fund excludes investments in companies that are involved with: mining, arms,
gambling, pornography, animal testing, nuclear power, alcohol or tobacco. All its
investments must have at least one positive environmental, social or corporate governance
quality.
OCF: 0.67%
ISIN – Inc: GB00B7FQJT36
Acc: GB00B77DQT14

PROPERTY

Fidelity Global Property W

This fund invests in the shares of property companies globally rather than directly in bricks
and mortar. It has a concentrated portfolio of 30 to 40 shares and focuses on larger
companies with good dividend yields. The fund’s largest country weighting at the end of
2018 was to the US at more than 50%, followed by Hong Kong and Germany.
OCF: 0.95%
ISIN – Inc: GB00BJ629381
Acc: GB00B7K2NZ09
10 investment trusts for starters

You might feel that investment trusts are not for you, as they are traded like stocks and
shares on the London Stock Exchange, and therefore their prices can go up and down
depending on investor sentiment.

However, many investors love investment trusts for their tendency to perform better than
actively managed open-ended funds over the long term – five years or more.

To get you started, here are 10 investment trusts to consider buying and stashing away for
the long term.

Investment trusts are identified by their TIDM (which stands for Tradeable Instrument
Display Mnemonics), a short, unique code, used to identify UK-listed shares (show in
brackets). We’ve also included the annual ongoing charges figure (OCF) for each trust.

UK STOCK MARKET INCOME

City of London Investment Trust (CTY)
A core holding for investors looking for long-term growth in income and capital from
companies listed on the London Stock Exchange, it has very low charges and a lower-risk,
cautious investment style. The dividend has risen every year for 50 years.
OCF: 0.41% 

Finsbury Growth and Income (FGT)

Its aim is to provide income and growth by investing primarily in UK-listed companies.
Manager Nick Train’s long-term patience and deep understanding of his companies sets
him apart from his peers.
OCF: 0.67%

UK STOCK MARKET GROWTH

Henderson Smaller Companies (HSL)
Seeking to maximise shareholder total returns by investing mainly in UK smaller
companies, its manager, Neil Hermon, has built up an impressive record of capital growth
and dividend increases. 
OCF: 0.42%

GLOBAL STOCK MARKET GROWTH

Scottish Mortgage (SMT)
Aims to maximise total return, while also generating real dividend growth, from a focused
and actively managed global portfolio, with a focus on the theme of technological change.
OCF: 0.38%

BMO Global Smaller Companies (BGSC)

Formerly called F&C, it aims for a high total return by investing in smaller companies
worldwide. The dividend has risen in each of the past 47 years.
OCF: 0.59%

Witan Investment Trust (WTAN)

A good core portfolio holding, it invests in global equities and is managed via a multi-
manager strategy, which means it invests in other funds.
OCF: 0.76%

Jupiter European Opportunities (JEO)

Fund manager Alexander Darwall has proved to be an exceptional stock-picker. He invests
in a focused portfolio of around 40 stocks and favours high-quality European businesses. 
OCF: 0.91%

GLOBAL STOCK MARKET INCOME

Murray International (MYI)
Its goal is to achieve income and capital growth through investments predominantly in
worldwide equities. Fund manager Bruce Stout is a ‘contrarian’ investor (he buys
companies that everyone else is selling).
OCF: 0.64%

PROPERTY
Picton Property Income (PCTN)
It aims to provide shareholders with an attractive level of income together with the
potential for capital growth, by investing in the principal commercial property sectors. The
charge is high, but performance has been good enough to justify this.
OCF: 2.05%

F&C Commercial Property Trust (FCPT)

Investing in a diversified UK commercial property portfolio, it aims to provide an attractive
level of income together with the potential for capital and income growth. 
OCF: 1.2%

How to create a PORTFOLIO

When putting together a portfolio of funds, the easiest way to think about combining these is through
the ‘core and satellite’ approach. This separates a portfolio of investments into two distinct segments.

The core, often the bulk of the portfolio, is made up of long-term, low-cost and highly diversified
investments. These are usually a combination of tracker funds, active funds or investment trusts.

 Your coffee break investment plan

The satellites, often small parts of the portfolio, are more specialist investments, often higher risk than
the core. These are usually active funds, investment trusts or shares in individual companies.

Many investors choose tracker funds for the core. These are designed to perform in line with their
benchmark stock market indices. They won’t outperform the benchmarks, but they typically won’t
underperform them either. Many investors then add in a few select actively managed funds to add value
and hopefully boost performance. And this is the basis for our Moneywise starter portfolios.

Getting ‘asset allocation’ right

No investment is a guaranteed route to riches. But while you can’t eliminate risk completely, you can
manage it by having exposure to a broad range of different investment assets, such as shares, bonds,
commercial property and gold. This is known as diversification.

The idea is that assets perform differently, so as losses are suffered in one area, they will be balanced out
by gains elsewhere. Should your investments in company shares (also known as equities) take a tumble,
for example, you would hope that your assets, such as bonds or commercial property, rise in value.
Should your UK shares suffer, your overseas shares may hold up better.

 Moneywise's First 50 Funds - 20 cheap tracker funds to use as core holdings

Diversification limits the risk of losing all your money in difficult periods. If the global financial crisis of
2008 or the post-Brexit vote market turmoil has taught us anything, it’s not to have all our financial eggs
in one basket, as it leaves us too vulnerable.

Proper asset allocation involves holding some cash as an ultimate safety net and then spreading money
that you can afford to lock away for at least five years in the three main asset classes:

 Equities (UK and overseas company shares)

 Bonds (loans to governments or companies)
 Commercial property (shops, offices and industrial buildings).

Some investors also add a small portion (5% of the portfolio) in commodities, such as oil, metals (gold or
silver, for example), natural gas and agricultural products.

Further diversification can be achieved through exposure to a variety of sectors in the stock market,
such as financials, utilities, consumer staples and healthcare, and exposure to different regions of the
world.
Good starting point

When setting up your portfolio, a good starting point is to look at the private investor indices run by the
Wealth Management Association (WMA), which until now represented the stock brokers and private
client investment managers who help customers invest their savings and manage their finances. Note
that the WMA merged with The Association of Professional Financial Advisers (APFA) to become PIMFA
(Personal Investment Management & Financial Advice Association) on 1 June 2017 and information
about the indices can now be found at Pimfa.co.uk.

 Investment styles explained

PIMFA’s five indices are designed to be a ‘talking point’ for investors when discussing the performance
of their portfolios with their advisory stock broker or wealth manager. They won’t be perfect for
everyone. But if you don’t want to pay for advice, we think they make a good starting point and guide to
the sort of asset allocation you need in a portfolio.

Tailored approach

Every wealth manager and independent financial adviser will give you a slightly different asset
allocation, depending on your individual goals and attitude to risk as well as their own view on the
sweet spots in the financial markets.

If you want to pay for this expert advice, it’s a valid approach that suits many people. However, if you
want to learn about investing and create a DIY portfolio from scratch, consider Moneywise’s simple
ways to get started in constructing a portfolio.

Our starter portfolios

We’ve put together two core and satellite portfolios for beginner investors with different goals. These
are based on the Balanced and Income indices within the Private Investor Indices already mentioned.

Balanced investing is for investors who want to growth their money over the long term with at least a
five-year timescale and have a medium appetite for risk. Income investing is for investors who want to
draw income immediately, but preserve and grow capital too.

The current asset allocation percentages for the balanced and income indices are shown in the table
opposite.

Private Investor Indices: Balanced and Income

  Private investor indices: Balanced and income

Balanced index* % Income index ** %

Asset class Underlying asset index
(2016%) (2016%)

UK shares 32.5 (35) 30 (35) MSCI United Kingdom

   Private investor indices: Balanced and income

MSCI All Country World

International shares 30 22.5 (17.5)
index ex-UK in GBP

UK government bonds 5 5 Markit iBoxx £ Gilts

Sterling corporate bonds 10 17.5 Markit iBoxx £ Corporates

Inflation linked sterling Markit iBoxx UK Gilt Inflation-

2.5 2.5
bonds Linked

Cash 5 5 LIBOR -1%

MSCI UK IMI Liquid Real

Commercial property 5 5
Estate

Hedge funds and alternative MSCI DMF 50% + 1W LIBOR

10 (7.5) 12.5 (10)
investments 50%

Total 100 100  

Notes: *Balanced investing is for investors with at least a five-year timescale and an appetite for risk. **For
investors who want to draw income immediately, but preserve and grow capital too.

Since we launched the starter portfolios in Moneywise’s August 2016 issue, the Private Investor Indices
have changed slightly.

The balanced portfolio has reduced its portion in UK shares by 2.5 percentage points, while adding by
the same amount to the portion held in hedge funds and alternative investments.

The income portfolio has reduced its portion in UK shares, while adding to overseas shares and hedge
funds and alternative investments.

Our starter portfolios incorporate these key features:

 the broadest possible coverage in terms of the number of assets held by the funds;
 the cheapest possible cost, in the form of the ongoing charges figure on the funds; and
 the simplest structure in terms of the number of funds held in each portfolio.

It’s probably best to drip-feed your money into these portfolios rather than invest a lump sum. It’s also
important to review investment performance at least once a year and rebalance the portfolios by
bringing them back in line with the indices – for more on why this is important, see "rebalancing your
portfolio" below.
Moneywise starter Income Booster Portfolio (six funds)
  Moneywise Starter Income Booster Portfolio

Original New
Initial Value of New
portfolio % of % of investme
investme 1 year initial portfolio
launched in 2016 2017 nt levels
nt in performan investme from
August portfoli portfoli after
£5,000 ce % nt after August
2016 o o rebalanci
portfolio one year* 2017
magazine ng

CORE

Vanguard Vanguard
FTSE UK FTSE UK
Equity 25 £1,250 12.74 £1,409 Equity 25 £1,406
Income Income
Index Index

BlackRock
Vanguard
Corporate
25 £1,250 2.2 £1,277 Global 25 £1,406
Bond
Bond Index
Tracker

SATELLITE

Artemis Artemis
Global 25 £1,250 22.4 £1,530 Global 25 £1,406
Income Income

Marlboroug
Evenlode
h Multi-cap 10 £500 18.03 £590 10 £562
Income
Income

Fidelity Fidelity
MoneyBuild 10 £500 2.09 £510 MoneyBuild 10 £562
er Income er Income

F&C
F&C
Commercial
5 £250 23.28  £308 Commercia 5 £281
Property
l Property
Trust

Total
portfolio   £5,000   £5,624     £5,624
value

*Performance data to 17 July 2017. Source: Moneywise

This is a portfolio for someone who wants to invest to boost their income, and has a long time scale of
five to 10 years and can therefore take more risk. On an investment of £5,000, it posted a return of
12.4% for the year to 17 July 2017.

In addition to rebalancing the portfolio, we’ve replaced a couple of funds.

We felt BlackRock Corporate Bond Tracker was too UK-centric. Instead, we have chosen the Vanguard
Global Bond Index, which is highly diversified, giving exposure to thousands of bonds around the
world. Investors can use it as a one-stop shop for developed market investment-grade-rated bond
exposure. The fund is currency hedged into sterling, which takes out the currency volatility for UK
investors, which we think is a good feature for a novice investor.

We’ve also replaced Marlborough Multi-Cap Income because our experts said it is really heavily biased
towards smaller companies rather than a truly multi-cap income fund. We’ve added Evenlode Income
instead, which aims to buy UK companies that can grow sustainably without needing to reinvest much
capital back into the business each year. The fund aims to produce attractive, long-term returns, with an
emphasis on income. With fewer than 40 companies in the portfolio, the managers say they believe in
quality over quantity.

Moneywise starter Growth Portfolio (four funds)

  Moneywise Starter Growth Portfolio

Original New
Initial Value of New
portfolio % of % of investmen
investme 1 year initial Portfolio
launched 2016 2017 t levels
nt in performanc investme from
in August portfoli portfoli after
£5,000 e% nt after August
2016 o o rebalancin
portfolio one year* 2017
magazine g

CORE

Fidelity Fidelity
Index Index
25 £1,250 18.29 £1,478 25 £1,371
World World
Fund Fund

BlackRoc
Vanguar
k
d Global
Corporate 25 £1,250 2.2 £1,277 25 £1,371
Bond
Bond
Index
Tracker

SATELLITE

CF 25 £1,250 13.94 £1,424 CF 25 £1,371

Lindsell Lindsell
Train Train
   Moneywise Starter Growth Portfolio

Global Global
Equity Equity

Jupiter Jupiter
Strategic 25 £1,250 4.59 £1,307 Strategic 25 £1,371
Bond Bond

Total
portfolio   £5,000   £5,486     £5,486
value

Source: Moneywise, *performance data to 17 July 2017.

This provides an excellent core from which to build your portfolio for long-term cautious growth (over
at least 10 years) in just four funds. You could start with the core passive funds and then add in the
active satellite funds once you feel ready. On an investment of £5,000 it posted a return of 9.7% for the
year to 17 July 2017.

 Moneywise First 50 Funds - 20 active funds to add value

Again, we’ve replaced the BlackRock Corporate Bond Tracker with the Vanguard Global Bond Index
fund.

Rebalancing your portfolio could boost your investments by an extra

10%

Regularly reviewing and rebalancing your portfolio could have boosted your investment returns by
almost 10% over 20 years, analysis from Fidelity International reveals. In addition to following the
adage of not putting all your eggs in one basket, it’s equally important to monitor your portfolio.

‘Rebalancing’ means selling some of the assets that have grown in value to buy more of those that have
fallen in value. However, particularly if you have a small portfolio, you should watch out for any dealing
fees that may be incurred when buying and selling investments to make sure they don’t wipe out any
potential gains from this strategy.

 Moneywise First 50 Funds - 10 investment trusts for starters

Over time, an investment portfolio can become unbalanced due to the ups and downs of its constituent
investments. It is critical, therefore, to periodically review the balance of your holdings to ensure they
continue to meet your needs. Furthermore, by rebalancing your portfolio annually you could
significantly enhance your returns. For example, if you had invested a £1,000 in each of the 13 principal
asset classes* 20 years ago, your initial investment would now be worth £52,881**. However, had you
been even more prudent and rebalanced your portfolio equally across the 13 different asset classes each
year then your investments would have grown to £57,930 – over £5,000 more*.
*These are: Commodities, Corporate Bonds, Government Bonds, Japanese Equities, UK Equities, Asia
Pacific Equities, Europe ex UK Equities, Emerging Market Equities, US Equities, Cash, Real Estate,
Emerging Market Debt, Global Equities. **Source: Fidelity International, May 2017.