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 October 2017, after all fees have been taken (based on 0.5% Wealthify management charge).
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. Past performance is not a reliable indicator of future performance. Source: Bloomberg.
|Investment Style||01/10/2012 - 30/09/2013||01/10/2013 - 30/09/2014||01/10/2014 - 30/09/2015||01/10/2015 - 30/09/2016||01/10/2016 - 30/09/2017|
Firstly, our experts designed and built an efficient online investment system.
Then, we programmed it with some clever algorithms based on a proven investment theory, known as the Sharpe Ratio. Professor William Sharpe is a Nobel Prize-winning Stanford academic and he knows a thing or two about investing.
Every day our system collects data from across global financial markets. Using technology allows us to keep costs down, which we pass onto you through lower fees.
Our experienced investment team use this information to oversee everything and make the best investment decisions. We rebalance your plan, if needed, to ensure it's still on track.
And if there's any turbulence in the markets, we automatically switch some of your investments to less risky assets, like cash, to protect them. Our aim is to make sure your investments take full advantage of the good times and are sheltered from the bad.
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.