ii Private Investor Index
A look at how ii customers' investments performed during Q3 2021, the past year and 18 months.
The interactive investor Private Investor Index gives a unique insight into customers’ investment performance during Q3 2021, the past year and 18 months.
In a quarter besieged by concerns over inflation, the average interactive investor customer portfolio, in median average terms, grew by 1.57% in Q3 2021.
At a glance
- The 65+ age cohort outperformed all other age groups, returning 25.1%. The 18-24 age group were the second highest performers (up 23.9%).
- The average ii customer account is up 23.95% over the year to 30 September 2021.
- Customers in Scotland performed best in Q3 2021, up 1.89%, followed by the Isle of Man and the East Midlands. London based investors’ portfolios returned 1.48%.
- Women performed slightly better than men in Q3 (1.67 versus 1.49%) and over the six-month period to 30 September 2021 (7.29% versus 6.88%).
Richard Wilson, CEO, interactive investor:
With almost two years of data behind our index – and counting – we can now get a clear picture of how the twists and turns of a tough period have played out on private investor portfolios.
Our customers have a mix of shares, ETFs, investment trusts, funds (including those with high bond weightings) and cash, so comparing with other indices and sectors is not straightforward – but it is still thought provoking. Our findings won’t always make for comfortable reading, either. Investing is intrinsically a long-term game and requires patience – an important and not always easy discipline during uncertain times.
Oldest and youngest lead over 12 months
Private investors outperformed the average professional multi-asset fund manager over the twelve months to 30 September, with older investors performing the best.
The average ii customer account is up 23.95% over the year to 30 September 2021, with the 65+ age cohort outperforming all other age groups, returning 25.1%.
Customers in the 18-24 age group were the second highest performing age group (up 23.9%).
This outstrips the return of the average fund in the Investment Association’s (IA) Mixed Investment 40-85% shares sector (16.77%), but trails behind the 27.89% return of the FTSE All Share and the FTSE World Index (24%), over the same period.
High on trusts – low on cash
Yet again, what ii’s youngest and oldest customers have in common is a higher-than-average allocation to investment trusts.
These tend to outperform funds in a rising market, and underperform in a falling market, due to gearing (borrowing). While the average ii customer has 21% exposure to investment trusts, the 18-34-year-olds had a punchier allocation of 33% (albeit with a lower-than-average allocation to direct equities). For the over 65 age group, investment trust average exposure is 27%.
The over 65 age group may also have benefited from having the lowest cash exposure of all the age groups (7.5%) over the past year - and the highest direct equity exposure (45%) – especially if you consider the fact that direct equity exposure tends to have a home bias on ii, over a period in which the UK has performed well. Conversely, this may also explain why this age group have performed the worst over the past 21 months.
The short and the long of it
Over the longer term (21 months to 30 September 2021, which is as far back as the data currently goes), the average ii customer account is up 11.26% in median average terms. This beats the FTSE All Share (2.41%) but is below the Investment Association’s Mixed Investment 40-85% shares sector average return (14.03%) and the FTSE World (28.72%).
The 18-24 age group generated the best performance on average over the past 21 months, returning 19.13%, followed by the 25-34 age cohort (16.84%), then 35–44-year-olds (15.97%). The 65+ age group performed the worst on average over the period, returning 8.5%.
Over six-months to 30 September 2021, the average ii customer portfolio was up 7.05%, more than the Investment Association’s Mixed Investment 40-85% shares sector average of 6.36%, but it is slightly behind the 9.69% return of the FTSE World Index and the FTSE All Share (7.95%). That said, ii’s 18–24-year-old customers, on average, managed to outperform the latter index – they were up a median average of 7.96%.
Since the start of the year to the end of September, the average ii customer portfolio was up 10.48% over the year to date, more than the Investment Association’s Mixed Investment 40-85% shares sector average (8.09% ) but behind FTSE World (14.17%) and FTSE All Share (13.56%).
Women performed slightly better than men in Q3 (1.67 versus 1.49%) and over the six-month period to 30 September 2021 (7.29% versus 6.88%), possibly resulting from a higher exposure to investment trusts. Investment trusts accounted for 25.2% of female portfolios among women and 19.6% for men.
However, men fared a little better over the year to 30 September 2021 (10.51% versus 10.46%), over the past 12 months (24.29% versus 23.44%) and 21 months (11.23% versus 10.83%).
Scottish Mortgage, Alliance Trust and Fundsmith Equity remain favourites among all age categories, while variants of the Vanguard LifeStrategy range featured in the top 10 most held investments by value across the board – bar those 65+ (on average).
Among stocks, Tesla remains popular, featuring in the top 10 bestsellers among the 18-24, 25-34, 35-44 and 45-54.
Lloyds Banking Group, Royal Dutch Shell and AstraZeneca were amongst the most favoured among those aged 55+.
interactive investor customers based in Scotland performed best in Q3 2021, up 1.89%, followed by the Isle of Man and the East Midlands. London based investors’ portfolios returned 1.48%.
Over the year to 30 September 2021, those living in the Isle of Man performed strongest, (11.06%), ahead of North East England and East Midlands. Over the past 21 months, Channel Islands was the best performing region (13.45%) followed by Scotland and London.
Find out how ii customers performed in 2020
The FTSE 100 was down -11.55% on a GBP total return basis in 2020, with the FTSE All Share down -9.82%. But interactive investor customers performed significantly better on a median average* basis, up 1.8%.
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