Interactive Investor

ii Private Investor Performance Index

A look at how ii customers' investments performed during Q1 2022 and in the past 27 months.

After a torrid time for stock markets in Q1 2022, interactive investor’s Q1 private investor performance index reflects a difficult period for private investors, with the average customer down 3.6% in median terms.

Not even the very wealthy were insulated: while historically customers with £1m plus accounts have performed the best since ii started publishing its index, in Q1 2022, they were down the most by asset band (4.2%).

While important not to dwell too much on one quarter, it is right to reflect on what has been a significant period, firstly from a humanitarian perspective with the devastating invasion of Ukraine, and secondly from a market perspective.

With data now going back 27 months, the index charts interactive investor’s customer performance data, in median average terms*, since the first Coronavirus cases emerged in the UK.

Comparison of customer performance by age band March 2022

At a glance

  • Average ii customer in line with professional managers** over 6 months and 1 year, and beating them by 6.5 percentage points over two years
  • Youngest adult customers in 18-24 age category nurse largest losses in Q1
  • Scottish Mortgage no longer the most held holding amongst all age categories
  • Women outperform men by 1 percentage point over both 1 and 2 years

Richard Wilson, CEO, interactive investor:

The horror unfolding in Ukraine has framed what was already a torrid time for markets.

Markets don’t go up in a straight line and this index is a sobering reminder of that. It’s also a reminder of the importance of taking a long-term view, and not putting all your eggs in any one regional basket. The UK’s comeback over the year to date illustrates that very clearly.

With more questions than answers for many investors in the current uncertain environment, there remain few alternative options beyond the stock market for those who want long term growth and income. The challenge is building a weatherproof, balanced portfolio, and we’re here to help, with our research tools and original content.

Young customers nurse heaviest losses in Q1 but sitting pretty longer-term

The latest ii performance index saw some of the shine come off younger, age 18-24 customer portfolios in quarter one, who are down the most, and by an average of 5.5%. The 65+ age group were down the least, nursing losses averaging 3.2%.

Whatever age you are starting on your investment journey, the path never runs smoothly – but don’t let short term blips throw a well-diversified portfolio off course. Our youngest age cohort may have suffered in the very short term from having the most international exposure, via a much higher than average exposure to investment trusts, which tend to have a high overseas focus. Even so, over the past two years and twenty-seven months respectively, the 18-24 age category are still ii’s highest performing cohort.

  • Kyle Caldwell, Collectives Specialist, interactive investor

Top holdings as at 31 March 2022

Private investors continue to be attracted by the dual benefits of collectives such as Scottish Mortgage, both in terms of diversification and access to the big tech sectors overseas.

The Vanguard Lifestrategy range also dominates the average holdings across all age groups. Apart from the 65+ category, where high yielding FTSE 100 blue chips dominate.

Private investors versus fund managers

With the average ii customer down 3.6% in Q1 2022, the scant consolation is that professional fund managers, as measured by the IA Mixed Investment 40-85% shares sector, did no better, and were down 3.7%. 

The IA Mixed Investment 40-85% shares sector is a useful comparison because it reflects a mix of equities and bond fund exposure, not to mention cash, that ii customers will have, on average, in their portfolio. 

Over six months the average ii customer and professional fund manager were each down 1% and over one year, up 5.4% and 5.3% respectively.

Over the past two years, the average ii customer, in median average terms, beat professional fund managers by a significant 6.5 percentage points. The average ii customer is up 39.7% versus 33.2% for the IA Mixed Investment 40-85% shares sector.


Customer performance in detail compared to indices – to end March 2022

Performance to 31.03.22IA Mixed Investment 40-85% SharesAverage ii customer    FTSE World TR GBPFTSE AllSh TR GBPFTSE 100 TR GBPS&P 500 TR (1989)
3 months-3.7-3.6-2.00.52.9-1.9
6 months-1.0-1.04.84.77.88.5
1 year    5.35.414.913.016.121.2
2 years33.239.760.843.241.570.3
27 months12.910.834.87.27.846.3

Source: FTSE Index performance, and IA index performance is source: Morningstar. Past performance is no guide to the future.

Gender returns

Despite the ongoing market turbulence, the data, once again, shows very little difference between male and female DIY investor performance. That said, women outperformed men by one percentage point over both one year and two years. With performance averaging the mid-single digits over the past twelve months, every percentage point difference counts.

Portfolios are broadly similar, with women slightly more inclined to favour investment trusts, and slightly less inclined towards direct equities. But the differences are minimal. Interactive investor now has around 120,000 female customers.

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*

ii customer performances quoted are median values to avoid the influence of outlier performance skewing the data. 

The performance is calculated using the Time Weighted Rate of Return with returns calculated before each money transaction, then the results compounded over the reporting period. The time-weighted rate of return (TWR) is a measure of the compound rate of growth in a portfolio. It eliminates the distorting effects on growth rates created by inflows and outflows of money.

Then median averages are calculated independently for each group we analysed – so that outlier performances did not skew the results.

Index performance, unless otherwise stated, is ii using Morningstar, total return in GBP, to end December 2021.

Portfolio values under £20,000 were stripped out to keep the sample representative of ii’s core customer base.

**

When referencing ‘professional fund manager’, we are referencing the IA Mixed Investment 40-85% shares sector as a useful comparison, because it reflects a mix of equities and bond fund exposure, not to mention cash, that ii customers will have, on average, in their portfolio. We have also included some FTSE index comparisons, for interest.