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Best investment performance for low-risk investors (March 2021)

By Mike Narouei, Content Producer at Boring Money

16 April, 2021

A low-risk investor is typically someone who wants a relatively smooth investment journey, no large swings up or down, and is potentially someone with shorter timeframes.

Which Robo advisers are best for you?

A low-risk investor is typically someone who wants a relatively smooth investment journey, no large swings up or down, and is potentially someone with shorter timeframes.

If you are investing with a timeframe of 3-5 years, or if you are looking for a little more oomph than cash but without the wilder adrenalin swings of the stock market, this could be for you.

The investment industry will usually say this low-risk investor should aim to have about 20% of their money invested in shares. The rest is typically in less volatile ‘bonds’ and cash.

Robo advisers have emerged onto the scene as simpler, easy ways for less confident investors to get started, buying the equivalent of an investment ‘ready-meal’. Once they know your risk profile, they do all the selection, blending and maintenance for you.

So who is any good?

Boring Money is tracking the performance of 10 leading providers of robo advice or ready-made portfolios. We show here the performance rankings for the first three months of 2021.

Three months is not enough to assess skill. Over this time, the best provider made a slight loss of 0.5% after costs and the worst provider made a loss of 3.7% after costs.

More telling is the longer timeframe for which we have data – the column which shows growth from January 2020 to end March 2021. We have shown here total returns over this most recent 15 month period, after all costs and charges have been deducted.

As we continue to collect data, and our track records increase, we will able to show you with greater confidence which groups are doing a good investment job.

HSBC (https://www.boringmoney.co.uk/isas-pensions/hsbc/), AJ Bell (https://www.boringmoney.co.uk/isas-pensions/aj-bell-youinvest/), True Potential (https://www.boringmoney.co.uk/isas-pensions/true-potential-investor/) and Nutmeg (https://www.boringmoney.co.uk/isas-pensions/nutmeg/) have fared well in both periods in question, when markets behaved quite differently. This can be seen as one indicator of skill.

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Next steps

We have picked a range of leading ‘ready-made’ portfolios from providers with whom we have test accounts or who share data with us. You can open an ISA or DIY pension with these providers and set up your one-stop shop investment inside this account.

You can visit our Best Buys tables here (https://www.boringmoney.co.uk/compare/) to learn more about how other investors rate these providers and what the overall service is like.

Or check back in July for the Q2 performance!

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