Ready-made Investments: income or growth?

05 June 2017

The decision whether to invest for income or growth will depend on your goals. Do you need an income stream now, or can you wait for your investment to grow over the long term? Whatever your goals, our Ready-made Investments can help, offering a choice of growth and income investments which you can match to your chosen risk profile.

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.

What you'll learn:

  • How investing for income and growth differ.
  • Why it’s important to take a long-term approach to your investments.
  • How our Ready-made Investments can provide a simple solution to building a diversified portfolio.

When you invest for income, any interest or dividends paid out from your investment can be distributed to you. The hope is that you will receive a regular income.

When you invest for growth, you’re usually hoping for a long-term gain, rather than a regular income. Any income generated will typically be reinvested, with the aim of raising the value of your investment over time.

Whether you’re investing for growth or income, you should aim to hold your investments for at least five years. That’s because if there are any market downturns, five years could hopefully be enough time for your investments to recover. Bear in mind though there are no guarantees; the value of investments can fall and you could still get back less than you paid in.

How Barclays can help

You can build a varied portfolio for income or growth yourself, but purchasing one of our Ready-made Investments – which invests in a range of asset classes rather than just one – may be an easier solution.

Barclays offers a choice of growth and income Ready-made Investments, which you can match to your attitude to risk, to help provide a simple solution to building a diversified portfolio. Diversification, which means investing in a range of different types of assets such as equities, bonds, property and cash, is important when investing, as it can reduce the overall volatility of your combined portfolio of investments. This is due to the fact each type of asset tends to perform differently at various points in time, so those that are performing well can hopefully offset those which at the same time have poor performance.

All our Ready-made Investments are monitored daily, aiming to limit downside performance, while at the same time taking advantage of new opportunities.

Please remember that investments can fall as well as rise in value, and there is a risk that you could get back less than you put in.

Investing for growth

We offer five different Ready-made Investments for investors seeking growth, which hold differing allocations of a range of assets including, cash, bonds and shares.

The one that might be right for you depends on your attitude to risk. Bear in mind that the more risk you take on with the hope of potentially higher rewards, the greater the chance of losing your money.

Each growth investment uses a different combination of passive investments. These typically aim to match the performance of an index they’re tracking, unlike an ‘active’ approach in which a fund manager actively aims to beat it. Passive investments generally have much lower fees than active investments.

The split of underlying investments will depend on the level of risk you choose to take.

We don’t offer personal advice. If you’re not sure about the level of risk you’re comfortable accepting, you should seek professional financial advice.

Investing for income

The prolonged backdrop of ultra-low interest rates has meant that a greater number of people have looked beyond savings accounts and accepted the risk they could lose money if they want to try to earn a higher income from their hard-earned cash. However, for those who need access to their money within a few years, or aren’t prepared to accept that they could get back less than they put in, savings accounts may still be the best option. If you’re unsure where to save or invest, seek professional financial advice.

Barclays offers two ready-made Income Investments, which provide lower and higher risk income options.

The lower risk Income Plus investment aims to generate a balanced income while limiting potential for losses, by investing largely in bonds and to a lesser extent, company shares.

Barclays High Income investment, which is higher risk, aims to generate a higher income, and to a lesser extent capital growth, by investing in similar amounts of company shares and bonds.

Low charges

Not only can investors using Barclays Ready-made Investments benefit from our investment expertise and heritage, but fees are clear and transparent, making it easy to understand exactly how much you’ll have to pay.

Growth Ready-made Investments

Each of our five Growth Ready-made Investments has an ongoing charge of 0.45%. There is also a 0.20% annual customer fee which covers the running of your account, making the total ongoing charges on the investment 0.65% per year.

Income Ready-made Investments
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% a 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% annual 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

If you’re unsure about where to invest, please seek professional financial advice as we don’t offer personal advice.

Remember too that even if you choose a lower-risk Ready-made Investment, your investments and any income derived from them can still fall in value and you may get back less than you put in.

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