Picking a Ready-made Investment from Barclays Smart Investor takes some of the hassle out of making investment decisions. They offer a quick, efficient and affordable way to invest, while also helping you to diversify and access markets around the world. Here, we consider five ways Ready-made Investments can make investing easier.
Creating a diversified approach
One of the biggest challenges for investors is building a portfolio with the right mix of assets to help protect them against sudden losses. A diversified portfolio is made up of a range of assets which are expected to perform differently at various points in time. This helps limit overall volatility and reduce the level of risk.
Barclays Ready-made Investments take the complexity out of building a diversified portfolio, because Barclays investment experts do it for you. Of course, maintaining a spread of investments doesn’t mean all risk attached to the investments is wiped out, but it can reduce the likelihood of losing a chunk of your money if the market suddenly falls. One of its other effects is to reduce the potential for higher returns.
Find out why it is important to diversify your investments
Catering for different approaches to risk
Deciding where to invest comes down to your attitude to risk, and time horizon. Barclays Ready-made Investments make it simple to pick between different levels of risk, with some more volatile than others, depending on what investments they hold. For example, our Growth Investments are given a risk-profile from 1 to 5, while we have two choices for our Ready-made Income Investment, depending on the level of risk you are comfortable taking.
If you’re conservative in your approach to investing and are less comfortable with the thought of losing your capital you might pick the cautious ready-made funds, at the lower end of the risk scale. If you’re not comfortable accepting any risk of loss to your capital, you would need to avoid investment altogether.
Lower-risk investments are aimed at people who want to take limited risks in the hope of getting a better return than from cash deposits, with some protection against losses during periods of market volatility. They typically have a higher proportion invested in fixed income bonds, and invest to a lesser extent in company shares.
Alternatively, you may choose a more adventurous investment if you are happy to accept a higher chance of losses in return for potentially higher returns over the long-term. A higher-risk fund will have a larger proportion in shares, for a greater chance of returns.
Ideally, investing in the stock market should be done for a minimum of five years and remember that, no matter how much you diversify your investments, their value can still fall as well as rise, as can income derived from them and you may get back less than you invested.
Choosing growth or income
You can pick an investment tailored to your particular strategy, depending on your financial goals, time horizon and risk appetite. This includes choosing between those investments focused on producing an income stream, or aimed at capital growth.
An income investment will aim to provide you with earnings from the assets into which the fund invests. They focus on income-paying assets that will hopefully offer scope for higher payouts in the future.
Yields are the income payout per unit expressed as a percentage of the unit price of the fund, and they may compare favourably to the interest on cash savings accounts.
However, there are no guarantees that income payouts will remain consistent. Like the value of the investments that produce them, income payments can fall as well as rise. You could lose money, and past performance is not a reliable guide to what might happen in the future.
A growth fund seeks to grow the original sum investing in a number of assets, such as bonds, commodities and company shares that have a solid earnings history, expanding revenues, and a positive outlook. These companies often reinvest profits in the business rather than pay an income to investors. Companies may be spread across a range of different geographical regions to help with diversification.
Find out more about investing for income and investing for growth
By choosing our Ready-made Investment you benefit from Barclays’ investment expertise in finding the right balance between different assets. This may provide some peace of mind if you have limited time to monitor your investments yourself.
Experts invest in different assets and regions and monitor funds daily, regularly rebalancing assets if necessary in an effort to create consistent, sustainable levels of income and returns. The Barclays’ team will move investments around when they see fit, and in response to changing economic circumstances.
Value for money
Investors should always pay attention to charges, as these can take a big chunk out of their long-term returns. Our Barclays Ready-made Investments benefit from a clear and transparent charging structure, making it easy to understand how much you’ll pay.
Each of our five Growth Ready-made Investments has an ongoing charge of 0.45% per annum . There is also a 0.20% annual customer fee that covers the running of your account, making the total ongoing charges on the investment 0.65% per year. Our Income Plus Ready-made Investment has an ongoing charge of 1.45%, plus an annual 0.20% customer fee, making the total ongoing charges 1.65% per year. The charges are expressed as a percentage of the value of the units the investor holds.
The High Income Ready-made Investment has a 1.48% ongoing charge, plus a 0.20% per annum customer fee, so total ongoing charges are 1.68% per year.
There is also a transaction fee of £3 or £1 if set up as a regular investment.1
Ready-made investments are not the right solution for every investor, and there are plenty of other investment options. Consider your situation and goals carefully before investing. The value of your investments may fall as well as rise, so you could lose money. We don’t offer personal advice. If you are unsure where to invest, you may want to seek professional financial advice.
Find out more about our Ready-made Investments
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