ii Quick-start Funds range: annual review

interactive investor has completed the annual review of its Quick-start Funds range for beginner investors.

One of the few positives of the past year and a half has been the rise in people taking control of their financial future, and the rise of the younger investor has also been a key theme.

While it’s too soon to identify any long-term trends, in a week that includes both A-level and GCSE results, young people’s finances will be front of mind for many parents with teens approaching university.

interactive investor, the UK’s second-largest DIY investment platform, has completed its annual review of the Quick-start funds for beginner investors and has scoured the multi-asset funds universe to ensure ii’s six recommendations remain best in class across a range of different risk profiles. ii looked at value for money, through to risk-adjusted returns, consistency, philosophy, process, size and scale. The Quick-start Funds are aimed at investors across a range of risk profiles and life stages.

Following the annual review, interactive investor has retained its six carefully selected Quick-start Funds for beginner investors – the Vanguard Life Strategy 20%, 60% and 80% Equity range and the BMO Sustainable Universal MAP range (cautious, balanced and growth).

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “These Quick-start Funds remain best in class and continue to be great one-stop shops for beginner investors.

“The Vanguard LifeStrategy range stands out for its clear and defined strategy, low cost, and strong long-term track record of outperformance since inception in 2011. The range has the most consistent risk-adjusted returns relative to peers.

“The BMO Sustainable Universal MAP range offers active management at low cost, incorporating multi-asset and sustainable investing, reviewed by an independent Responsible Investment Advisory Council.

“With a highly experienced team with a strong long-term track record of asset allocation and sustainable investing, this is a competitively priced range with an ongoing charge of 0.35% for ii customers.”

ii compared its Quick-start Funds with peers in other groups: the Cautious (equity up to 20%), Moderately Cautious (equity between 20%-40%), Moderate (equity between 40%-60%) and Moderately Adventurous (equity between 60%-80%).

The retained interactive investor Quick-Start range is as follows:

ACTIVE/SUSTAINABLE

• BMO Sustainable Universal MAP Cautious. The lowest risk of the three BMO funds. It targetsan annualised return of 2% above inflation over five years and can hold as little as 20% and as much as 60% in equities.
• BMO Sustainable Universal MAP Balanced. The medium-risk option.The fund targets an annualised return of 3% above inflation over five years.  The fund can hold as little as 30% and as much as 70% in equities.
• BMO Sustainable Universal MAP Growth. The most adventurous, higher risk of the three but with potential for higher gains. The fund targets an annualised return of 4% above inflation over five years and can hold as little as 40% and as much as 80% in equities.
• Bear in mind that each target for the funds is just a target and not guaranteed.

PASSIVE

• Vanguard LifeStrategy 20% Equity - for shorter term goals (3-5 years)
• Vanguard LifeStrategy 60% Equity (for 5+ years)
• Vanguard LifeStrategy 80% Equity (for 5-10 years)

Interactive investor’s approach to its annual review:

Quantitative screening, including analysis of manager success relative to peers and benchmarks, undertaken with the following metrics:

•       Performance consistency

•       Risk-adjusted returns

•       Downside protection and drawdowns

•       Value For Money: Risk-adjusted return vs Ongoing Charge

Qualitative evaluation of potential was also completed based on three primary attributes:

•       Philosophy & Process: clear well–defined process for asset allocation and/or volatility management

•       People: experience in running multi-asset strategies

•       Size, scale, expertise, track record and level of commitment to the strategy

Moira O’Neill, Head of Personal Finance, interactive investor, says: “There’s something to be said for making sure, as an investor, you don’t try to run before you can walk. Starting with a pooled vehicle such as a globally diversified multi-asset fund or investment trust is a great way to get started, spreading your risk across hundreds of companies and markets. Our Quick-start funds spread risk across hundreds of global equities and bonds over a range of risk profiles, at ultra-low cost and with active sustainable and passive options included.”

Notes to editors

These Quick-start Funds are not personal recommendations, meaning we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. You should ensure any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think you need a personal recommendation, you should speak to a suitably qualified financial adviser. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest.

Full performance can be found on the fund or index summary page on the interactive investor website.