Guide to ready-made investment portfolios

Ready made portfolios let you leave your investments to an expert. Find out how they work.

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.

Picking investment funds is a tricky business. There are thousands to choose from, each with different bells and whistles. Finding the right one can feel like a full-time job. Fortunately, for some people, it is their full-time job! For the right price, they’ll make a “ready-made portfolio” for you.

What is a ready-made investment portfolio?

Ready-made portfolios pick the right blend of assets – shares, bonds, property and cash – and the right blend of investments, usually unit trusts and investment trusts from different managers. This makes one big delicious investment smoothie for you.

They will usually work to a certain risk parameter: low, medium or high. A lower-risk portfolio may have more in bonds and cash, for example, while a higher-risk portfolio will have more in faster growth areas such as smaller companies or emerging markets.

What’s the main benefit?

There are two big benefits:

  1. It’s easier than doing it yourself. The idea with these portfolios is that they are lock and leave, invest and forget. You get a fully diversified portfolio all in one place. You don’t have to do anything: the portfolio should adapt to changing market conditions and you can get on with your day jobs. That’s the theory, at least. As with any investment there are risks.
  2. The experts are likely to do a better job than you, sorry. In theory, the experts should do a better job than you could do. They have access to all the best research and can pick up the phone to a fund manager at the drop of a hat. An expert fund selector knows the right questions to ask and picks the right fund manager for the job. Equally, the experts can blend the right portfolio, with diversified assets, appropriate to an investor’s risk profile. They can also vary the mix of the portfolio depending on the market environment. This should help defend a portfolio against falling stock markets, for example.

Great. So I don’t have to do anything… right?

Don’t get ahead of yourself. You’ll still need to do a bit of work. At the very least you’ll need to work out the right option for your particular investing needs.

However, many platforms and advisers will help you to work this out. The rule of thumb is that if you have years and years to invest, you’re probably “high-risk” because you can ride out the highs and lows of stock markets.

If you think you’ll to need the money soon, you should gravitate to low-risk portfolios. Bear in mind your risk level will change as you get older, which may mean changing your options.

What are the main drawbacks of a ready-made portfolio?

The main drawbacks of ready-made portfolios are:

  1. It can be expensive. Ready-made portfolios add another layer of fees. For the most part, an investor has to pay the manager and also to pay the cost of the underlying investment. This can bump up the overall cost and you could be looking at a round-trip cost of over 1%. If the experts get it wrong, the poor old investor (you) has paid a load of fees for no discernible benefit, which eats into your savings. Fees can have a real drag on your savings over time. A drag of 0.5% on a portfolio of £50,000 over 20 years can be the difference between it growing to £135,632 (at 5%) or just £122,773 at 4.5%.
  2. You’re trusting someone else to do better than you. You’re taking a gamble on whether the experts get it right, or whether you could do it better yourself. Having said that, fees have come down a lot in recent years. The inclusion of passive funds has helped lower costs.
  3. It’s not always easy to judge performance. It’s not always easy to know whether you’re in a good one. Most will appear in performance tables, so you can compare performance, but that can feel like hard work for what is supposed to be a low-energy option. It is worth keeping an eye on how they’re doing over time. You need to know that those extra fees are actually helping you get wealthier over time.

Who offers ready-made portfolios?

In general, there are four main groups that offer these ready-made portfolios:


Platforms such as Fidelity FundsNetwork, the Share Centre or Nutmeg will offer a range of ready-made portfolios. These will be a blend of investment funds, designed to match a range of different risk profiles. There will be differences between them: cost, the extent to which they use passive portfolios and how good they are. Performance can vary considerably.

Equally, some ready-made portfolios allow a little more flexibility. AJ Bell, for example, allows more-experienced investors to play around with the fund choices or asset allocation weightings in its ready-made fund offering. This can be useful as investors grow in confidence.


The line between an adviser and a platform is often blurred. Hargreaves Lansdown, for example, has an advice arm as well as a platform. It offers six ready-made portfolios populated by its multi-manager range. Nutmeg is an online adviser, offering exclusively passive ready-made portfolios. Many of the so-called “robo advisers” use a similar approach.

Fund managers

Groups such as BMO Asset Management or Jupiter with its Merlin range offer ready-made portfolios. These are structured as unit trusts and can usually be bought from a platform. These tend to be real experts, with large teams that have picked funds and created portfolios for many years.

Discretionary fund managers

Usually for the super-rich only. If you’ve got a cool million or so to invest, you can get a portfolio designed exclusively for you. That means you can decide whether you want to include oil companies, technology or only have investments that meet certain ethical or sustainability criteria.

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