Your money is invested using a number of funds. Funds contain a collection of investments and are a convenient and cost-effective way to invest.
Some of these funds contain shares, but they also contain other good stuff, like bonds, property and commodities (such as precious metals, energy and agriculture). This is known as diversification and is a way to spread out your risk.
The mix of funds will change over time and depends on your attitude toward risk, as well as how financial markets are doing.
We use mostly low-cost passive investments, such as ETFs and mutual funds. These let your money track a market index like the FTSE 100 in the UK, and many others around the world. Passive investing is proven to be more effective long-term than an active investment strategy, where fund managers pick the stocks they think will do best.
Here's how we performed across the full range of Wealthify Plans, from Cautious to Adventurous, between 1st March 2016 and 31st December 2018, after all fees have been taken (based on 0.7% Wealthify management charge). These figures are based on the performance of Plans worth more than £750, and will be different for Plans below that amount.
The above graph illustrates past performance for Original Plans only. The past performance data shown is simulated, but it represents real transactions we've carried out for actual customer Plans across each of our five Investment Styles. Simulated past performance is not a reliable indicator of future performance.
|Investment Style||01/01/2014 - 31/12/2014||01/01/2015 - 31/12/2015||01/01/2016 - 31/12/2016||01/01/2017 - 31/12/2017||01/01/2018 - 31/12/2018|
Founded in 1975, Vanguard is a US-based investment management company holding over $3tn in assets under management. Vanguard is the largest provider of mutual funds and the second largest provider of exchange-traded funds (ETFs) in the world.
Founded in 1836 Legal & General is a major multinational financial services company with total worldwide assets exceeding $1tn. Based in London, they are listed on the London Stock Exchange and are a constituent of the FTSE 100 Index.
BlackRock, Inc. is a multinational investment management corporation based in New York City. Founded in 1988, BlackRock is the world's largest asset manager with over $4.5tn in assets under management.
HSBC is one of the world’s largest banking and financial services organisations and was established in 1865 to finance trade between Europe and Asia. HSBC’s Global Asset Management division manage $470 billion in assets across 26 different countries in a network of close to 500 investment professionals.