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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
We recently carried out an in-depth review of our Starter portfolios. As a result, we’ve made them both simpler and lower cost for new investors.
Let’s start with the simpler approach. Each portfolio is now spread across two types of investments: global shares and global bonds. These are large, easily traded markets that have worked well together over time. Also, each portfolio is now made up of just five funds, with an equal 20% weight in each. These fixed weightings are simpler to understand, making it easier to rebalance your portfolio should you choose to do so.
Next, cost. By reducing the number of funds in each portfolio, you’ll pay less in dealing fees when buying and re-balancing the portfolios in future. We’ve also introduced passive funds into each portfolio. Passive funds typically cost between 0.1%–0.2% per annum, offering a cheaper route to investing in markets than actively managed funds (which typically cost between 0.6%–0.8% per annum). That said, the portfolios continue to be mostly invested in actively managed funds, giving the potential for above-market returns driven by the expertise of these fund managers.
Despite these changes, the principles behind the Starter portfolios remain unchanged. You pick the portfolio that best suits your investment goals, and our AJ Bell Investments team choose the individual funds, all of which also appear on our high-quality Favourite funds list.
Keep in mind that these portfolio updates have been primarily designed for new Starter portfolio investors. If you’re already invested in a Starter portfolio and are considering rebalancing to mirror these new portfolios, make sure you review any associated charges.
Remember, once you’ve bought a Starter portfolio, it’s up to you to manage it. If you're not confident about managing your own portfolio, you might prefer our AJ Bell funds instead. They let you leave the day-to-day investing decisions to our expert team.
Disclaimer: We hope you find this update useful. Please remember that it falls to you to monitor and manage your own investments and to make any changes you think are necessary. Keep in mind this is information only, and not a personal recommendation to buy or sell any funds.
Written by:
Paul Angell
Head of Investment Research
Paul Angell is AJ Bell's Head of Investment Research. Paul began his investment career with a global investment bank in 2010, holding various roles across London and Hong Kong over the following years. He joined AJ Bell in 2023.
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