InvestEngine is a new investment platform that invests your money for you in fully managed ready-made portfolios. It’s recently announced DIY portfolios, which let you create your own portfolio from its range of exchange traded funds (ETFs). InvestEngine lets you choose between a range of different types of accounts, including individual savings accounts (ISAs). Find out what we thought of InvestEngine, the types of investments available and what it’s got up its sleeve for the future.
What does InvestEngine do?
InvestEngine has two different approaches, managed portfolios and DIY portfolios.
Managed portfolios are commonly known as robo advice. This means it builds and manages ready-made investment portfolios for you in exchange for a fee. Robo-advisors include Nutmeg, Wealthify and Wealthsimple.
What products does InvestEngine offer?
InvestEngine has three different accounts that you can invest in:
- General investment account (GIA). For flexible investing without any limits.
- Individual savings account (ISA). Use your ISA allowance to invest tax free.
- Business account. For investing your company’s surplus money.
InvestEngine personal account
The personal account is InvestEngine’s general investment account. Like the other accounts, you can start with £100.
With this account you might have to pay income tax on your profits. Tax is payable on profits over £12,300.
With the InvestEngine ISA, you can use your annual ISA allowance to invest tax free. You get an allowance for each tax year, up to which you can invest without paying tax on your profits. The allowance for the 2021/2022 tax year is £20,000.
InvestEngine business account
This account is for businesses that have some surplus money that they’d like to invest. It’s a potential way to earn better returns on the money sitting in your bank account. The money can be accessed whenever you want, but any tax advantages depend on your business circumstances.
InvestEngine ready made portfolios
InvestEngine’s ready made portfolios are fully managed. As with other robo-advisors like Moneyfarm and Nutmeg, your portfolio depends on your appetite to risk. It asks you a set of questions that helps the platform understand how you feel about risk to suggest a portfolio for you.
InvestEngine automatically rebalances your portfolio to ensure that it stays aligned to your investment plan. It’s investment team keeps an eye on your portfolio to make sure it remains well-positioned for the latest market conditions.
You can choose between growth portfolios and income portfolios.
Growth portfolios have a primary goal of capital growth, which is to mean that the main goal is for the value of the stocks to rise. Any companies in these portfolios tend to reinvest their earnings into growing the company, such as through expansion, acquisitions and further research.
Income portfolios have a primary goal of providing a regular income. Any income received is often paid into your nominated bank account. The amount varies depending on the dividends received from the exchange traded funds (ETFs) in your portfolio.
Here’s how it works:
- Choose what sort of portfolio you want. You can choose between Income and Growth – we explain these further down.
- Choose an account. You can invest in an ISA, a general investment account or a business account.
- Answer some questions. These are mainly about your investment goals and how much risk you want to take.
- InvestEngine matches a portfolio to you. This will be suited to your risk level. It’ll be a selection of
exchange traded funds (ETFs).
- Fund your account. You can start with just £100.
- InvestEngine manages your portfolio for you. It’s as easy as that. InvestEngine will constantly adapt your portfolio to keep you on track.
InvestEngine DIY portfolios
InvestEngine’s DIY option lets you choose which ETFs you want to be invested in. You can choose between 150 funds, including ESG and thematic choices. Once you’ve chosen which ones you want to invest in, you can choose how they’re weighted. This means that you don’t have to be invested equally in each fund.
InvestEngine has one click rebalancing, which means that as the markets rise and fall, your portfolio stays consistently balanced to the weights you have chosen. You also don’t need to set up ETF trades — you can buy and sell based on your portfolio weights.
There are no fees for InvestEngine’s DIY portfolios.
Its managed portfolios have a (relatively) simple fee structure:
|Fee||What’s it for?||Managed income portfolios||Managed growth portfolios||DIY portfolios|
|Management fee||For building and managing your investment portfolio for you.||0.25%||0.25%||Free|
|ETF charge||Charged by the ETF providers for investing in exchange traded funds.||Around 0.25% per year||Around 0.15% per year||Between 0.05% and 0.75%. Averages around 0.24%.|
|Market spread||The difference between the purchase price and selling price of the ETFs in your portfolio.||Around 0.07% per year||Around 0.07% per year||N/A|
|Setup fee||A fee for setting up your account||£0||£0||£0|
|Dealing fee||The cost of buying or selling financial instruments||£0||£0||£0|
|ISA fee||The cost of having an individual savings account (ISA) tax wrapper on your account.||£0||£0||£0|
|Withdrawal fee||A fee to withdraw your money from your InvestEngine account||£0||£0||£0|
The minimum amount you can deposit into your account is £100.
What does this actually mean?
A £1,000 investment will incur fees of around £5.70 with an income portfolio while the growth portfolio would cost you around £4.70 for a £1,000 investment.
A £10,000 investment will incur fees of around £57 if you’re invested in an income portfolio and around £47 for growth portfolios.
InvestEngine mobile and web apps
InvestEngine can be accessed on its website as well as with a mobile app. You can top-up within the app and see your dashboard to manage your account. It lets you see what you’re invested in and a percentage of how much of your portfolio is in each investment.
It’s also got some handy in-app calculators to help you understand how your savings could grow based on one-off investments, how much you plan to invest each month, your risk profile and timeline.
InvestEngine has a UK based support team that can be accessed via email, over the phone and with an online form.
Is InvestEngine safe?
InvestEngine is authorised and regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS). This means that if InvestEngine were to go bust, you’d be covered for up to £85,000 of your deposits.
Pros and cons of InvestEngine
- Has a current onboarding offer of £50 for new customers that register and build a portfolio with InvestEngine
- Relatively low fees compared with other robo-advisors and great fees for the DIY option.
- The suggested portfolio created by the risk questionnaire gives a lot of detail about the portfolio suggested.
- Lets you build your own portfolio.
- Ethical options available
- The non tiered fee structure could prove to be more expensive for investors with a lot of money to invest.
- The risk questionnaire uses a lot of investing jargon that might confuse newbies.
- You can’t choose specific stocks and shares for your portfolio.
Our verdict: Is InvestEngine any good?
InvestEngine is pretty new to the investing game. We like that there are options available for those who want ready-made portfolios as well as those who want to build their own portfolios.
It’s a fresh take on the robo-advisors we’re familiar with, like Nutmeg, Wealthify and Moneyfarm. Its set fee structure is refreshing but could prove to be expensive for anyone investing large sums (we’re talking upwards of £100,000).
It would be nice to see more about the individual portfolios and how they invest. We also love that there are some ethical portfolios available, with the rise of ESG investing.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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