The interactive investor (ii) index: Q1 2025

interactive investor (ii), the UK’s second-largest platform for private investors, has published its latest instalment of the ii Index, providing data and insights on how the everyday retail investor is performing and positioning their portfolios in this ever-changing market. 

• Invest with ii: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

Key findings: 

• The average ii customer once again outperformed the IA Mixed Investment 40-85% Shares sector across all time frames examined
• Those aged 35-44 are the top performers – and passives take up almost one fifth (19%) of their portfolios
• Investors in older age groups tend to have a higher weighting to direct equities 
• The frontrunners: of the top 10 holdings across all age groups, 60 in total, 24 are passive investments, and Vanguard’s LifeStrategy Range is most prominently featured 
• Gilt-y pleasures: gilts continue to be popular with ii investors, with T26 taking the stage as TN25 matured in January
• Little difference between performance and portfolios of men and women 

interactive investor has tracked fiver years and three months of data, which shows that the average ii customer has seen their portfolio grow by 25.8% — beating the aggregated performance of funds in the IA Mixed Investment 40-85% Shares sector (22.5%). The sector can be a useful comparator for private investor portfolios, given its mix of bonds, cash, and equities.

The average ii customer also outperformed the benchmark across most time frames measured.

Performance data to 31 March 2025. Source: interactive investor/Morningstar.

Camilla Esmund, Senior Manager, interactive investor, says: “With more than five years of data, we have a real bird’s-eye view of the retail investing landscape and behaviour – over a time period that has also been incredibly testing for investors.

“While we’re currently in a particularly volatile period, it’s interesting to see that ahead of the tariff announcements, our investors continued to stick with their knitting – not making any wholesale changes to their portfolio. It’s promising to see that interactive investor customers have continued to prove their resilience, weathering market storms, and sticking to their long-term strategies.”

Age analysis - performance

Those aged 35-44 have outperformed – with their performance at 29.3% over the five years and three months since our tracking began. Investors in this age bracket tend to have a higher weighting to funds (31.3%), ETPs (19%), and bonds (7.4%) compared to their counterparts. ETPs – or ‘exchange traded products’ are largely made up of ETFs (exchange-traded funds).

Where are people putting their money? 

Almost 40% of the average portfolio of those aged 65+ are invested in equities, doubling that of those in the 18-24 and 25-34 age ranges (20% and 21% respectively).

Investment trusts have held their popularity with our youngest and oldest cohorts – with those 65+ having a 24.4% allocation, and those aged 18-24 with a 21.5% allocation.

Investment trusts have been trading at double-digit discounts for the longest sustained period on record, and the average discount has been wider than 10% since 2022. The opportunity to buy on a discount and pick-up a potential bargain is one of the attractions of investment trusts.

For the younger investors in particular, it is possible that they have a JISA that has matured, where their parents may have chosen to go for investment trusts – explaining the higher weighting.

Kyle Caldwell, Funds and Investment Education Editor, says: “Investment trusts have certain bells and whistles that private investors can use to their advantage, and it appears that parents have been tapping into those quirks on behalf of their children. One of the key differences between investment trusts and funds is that investment trusts are allowed to gear (borrow to invest). Over the long term this can improve their performance, but over shorter time periods, particularly when stock markets are choppy, they tend to be more volatile than funds.

“Investment trusts also give investors the opportunity to pick up a potential bargain. Investors who buy at the right time, resulting in a high discount falling to a low one, or even moving to a premium, boosts the share price return. 

“In our top 10 holdings, three investment trusts feature in the 18-24 age category, two in the 25-34 age category, and one in the 35-44 and 45- 54 age categories. For investment trusts to win over the next generation of investors, investment trusts need to prove to a new generation of investors that their active approach can compete with index funds and exchange-traded funds (ETFs).”

Generally, younger investors are more likely to go for ETPs, with those aged 25-34 at 19.2%, and those 35-44 at 19%. Passives have continued to rise in popularity over the last year, taking up more space in investors’ portfolios – with the same age ranges investing 16% and 16.5% respectively a year ago (in Q1 2024.)

Portfolio breakdowns across ages

Top holdings across age groups

Across all the top 10 holdings for each age group, 60 in total, 24 of these are passive investments, and most prominently featured is Vanguard’s LifeStrategy range. The only age group where neither Vanguard’s LifeStrategy range nor any passive investment options are listed is for those aged 65+.

The oldest cohort of investors on interactive investor (aged 65+) show a clear preference for direct equities. In the top 10 most-held investments in this age group, one active fund features – Fundsmith Equity – but we can see a lot of UK equities, such as Lloyds Banking Group (LSE:LLOY) and Rolls-Royce Holdings (LSE:RR.).

The full report for the Q1 2025 ii Index can be found here.