Investing Made Easy: Your Guide to Ready-Made Portfolios
The basics of ready-made portfolios
A ready-made portfolio is a premade bundle of investments. All the hard work of researching and stock-picking to curate a diversified portfolio is done for you by a professional, who wraps it all up into one single product. The underlying investments and how they're allocated is researched and chosen by a professional fund manager, who may also continually monitor its performance.
Ready-made portfolios can be a great way for beginners to take their first steps into the world of investing. It’s the ultimate low effort way to invest – without having to spend hours scouring the internet doing your own research.
They're often well-diversified, meaning they take steps to spread your investment risk, which may include investing in:
Across different regions, such as developed and developing markets
Different sectors of the economy, such as energy and agriculture
Usually, a provider will offer a selection of ready-made portfolios tailored to different risk levels. You might see, for example, ready-made portfolios called ‘Cautious’ (low risk), ‘Balanced’ (medium risk) or ‘Adventurous’ (high risk). You may also come across alternative names like ‘Defensive’, ‘Conservative’ or ‘Growth’.
Different providers tend to have their own naming conventions, but broadly speaking they’re referring to the amount of investment risk associated with the portfolio.
You can invest in ready-made portfolios through an investment account, including a Stocks & Shares ISA, a General Investment Account (GIA) or with a Self-Invested Personal Pension (SIPP).
Are ready-made portfolios right for me?
The pros of ready-made portfolios
✅ Straightforward and simple
You don’t have to do much to invest in a ready-made portfolio. All you have to do is arrange the initial investment and voilá, you’re an investor. This makes them a good choice for beginners who don’t want the fuss of setting up and running an account full of dozens of individual investments which need ongoing monitoring and rebalancing.
✅ Managed by an expert
If you don’t feel confident about picking a ‘good’ investment from a ‘bad’ one, the fund manager for a ready-made portfolio does all the research and number-crunching for you. It’s less pressure on you and means your portfolio is likely to do better than if you managed it yourself (because you’ve got an expert making all the decisions, after all).
✅ Can pick your preferred risk level
Many ready-made portfolios are ranked by their risk level (broadly speaking, how much exposure they have to shares vs less volatile assets like bonds). Descriptors like 'Cautious' or 'Ambitious' are frequently used, or sometimes expressed using visuals such as chilli peppers - not unlike the spice rating on a takeaway menu! This makes it easy to determine if the product suits your desired level of risk and saves you from having to wade through a text-heavy KIID to make the call yourself.
Investing can feel easier once you get into the swing; the difficult bit is knowing where to start. After all, there are tens of thousands of investment options out there, offered by a growing number of investment platforms. I think ready-made portfolios can be a good starting point. These are off-the-peg portfolios and offered by most investment platforms. They are ideal for people who don't want to spend their time handpicking funds and learning the ins and outs. They don't require you to make any decisions about what to invest in. The only questions you'll need to answer are about how much risk you are willing to take on.
The cons of ready-made portfolios
❌ Not enough choice
If you’re a more experienced investor or someone who would prefer to have control over the ins and outs of their investments, a ready-made portfolio isn’t going to give you enough choice. All the decisions about what the portfolio is invested in, the proportion each element makes up of the whole and whether or not any adjustments are necessary are made for you – so if you want to be in total control, it’s not for you.
❌ Can be expensive
Ready-made portfolios can come with a higher price tag if you buy them through a robo adviser. This is because robo advisers typically offer a rebalancing service where your portfolio is continually monitored and adjusted using complex algorithms and AI designed to match your chosen level of investment risk (more on robo advisers and risk later). You’re essentially paying a bit extra for the convenience of not having to do this number-crunching – or the admin of manually tweaking your investments – yourself. For some this isn’t worth it, but for others, some extra money every year for someone else to do the hard work is a sacrifice worth making.
Alternatively, ready-made portfolios cost the same amount on a standard investment platform as buying all the individual investments separately on the same platform. But for many investors, and particularly for beginners, if you’re happy with what a ready-made portfolio is investing in, it's usually easier to just buy it. Otherwise you're managing dozens of individual investments separately for the same end cost.
❌ Hard to compare performance
There’s a large selection of ready-made portfolios on the market, all of which can invest in very different things in very different ways, which can make it difficult to compare how the one you’ve got is doing relative to similar ones. This could mean you end up sticking around in a portfolio which is underperforming simply because you’re not aware of its relative performance.
Fortunately, we’ve got just fix for that - click here to see the latest performance results from the UK's top ready-made portfolio providers.
Top questions on ready-made portfolios
How much do ready-made portfolios cost?
The cost of investing in a ready-made portfolio depends on which one you choose and the provider that runs it. All-in fees are typically in the range of between 0.50 - 1% per year.
Ready-made portfolios bought from a robo adviser are usually on the higher end of this scale. However, as we mentioned before, you’re effectively paying for the convenience of the robo adviser to select and monitor all the underlying investments for you on an ongoing basis. This means that the price is sometimes a bit higher, but there’s less effort required from you to regularly tweak and rebalance your portfolio by yourself.
What’s the difference between a multi-asset fund and a ready-made portfolio?
In simple terms, a multi-asset fund is a single fund that holds a variety of different assets. A ready-made portfolio, on the other hand, is usually a bundle of different funds (often including multi-asset funds) prepared by an investment provider to match
Think of the fund as one dish and the portfolio as the whole buffet.
Multi-asset fund | Ready-made portfolio |
A single fund that provides exposure to multiple assets within one product – for example, bonds, shares and commodities. | A type of multi-asset fund which provides a blend of bond and equity exposure depending on your tolerance for risk (more on this below). |
How do I know which risk level is right for me?
Deciding how much risk you’re willing to tolerate with your investments is ultimately a personal decision. It’s important however to understand what we really mean when we talk about investment ‘risk’ before you make a decision.
It’s not the same as - let's say - gambling, skiing down the black run, or even driving on the motorway at 100 miles per hour. Investment risk is actually all about volatility and how much the stock market can fluctuate over a given period of time. If you're investing over 30 years, for example, the ups and downs of today don't matter as much because you’ve got plenty of time to make up for any poor performances. But if, on the other hand, you’re investing for only 5 years, your investments would have a lot less time to recover if markets took a dip. So you can see, timeframes play a huge role in investment risk.
As a rule of thumb, the more risk you take, the greater the chance of higher returns over the long-term. However, only you will know which category is right for you. Generally speaking, if your investment time horizon is ten years or more, then you could consider the higher risk portfolios. For those people investing with shorter time horizons - five years or so - or who don't have an appetite for alarming ups and downs, the low risk portfolios could be a good option. In theory, they should offer a smoother investment ride; they will make less over the long-term, but face less short-term volatility. Less than five years though and cash may be your best bet.
It’s also important to remember the very real risk of underestimating the impact of inflation on cash. Though it’s understandable to feel unsure and even nervous about investing your money, you could be locking yourself into losses if you leave your money in a current account or low interest savings account. Inflation will chew away at your pot over the longer-term and you could end up with savings that are worth considerably less than they were when you started. For example, if inflation is at 5% and you’re only earning 3% interest on your current account, then you’re actually losing 2% in real terms.
For those aiming to save for five years or less, this is less of a concern, but the cumulative effect of inflation over periods longer than this could erode the value of your savings. So if you’re going to be investing for five years or more, for most people it’s generally worth considering investing to protect yourself against the corroding power of inflation.
The table below is a very rough guide of how your investing timeframes can inform the level of risk that’s best for you – your ‘risk tolerance’. Of course, this is ultimately a personal decision and there are no guarantees when it comes to investing; your money can go up in value as well as down, no matter how ‘risky’ your investments are advertised to be. But you may find the rules of thumb below a helpful guide for understanding a reasonable level of risk depending on your timeframe.
Risk tolerance according to timeframe
Your investing timeframe | 5 years or less | 5-10 years | 10 years or more |
How much risk is right for you? | Low or very low - cash may be best if you can get an interest rate in line with or above inflation | Medium | High |
What is the best performing ready-made portfolio?
As there are so many ready-made portfolios on the market, and because they all contain different investments split in different ways, it can be hard to compare and determine if the one you’re investing in is actually performing well – or if, maybe, it’s not living up to your expectations. That’s where we come in.
Every quarter (three months), we crunch the numbers for you and analyse the ready-made investment market to identify the top performers, so you can see how well your investment is faring compared to similar portfolios. Click the link below to see the latest figures.
Key takeaways on ready-made portfolios
😎 A low-effort way to start investing
Ready-made portfolios take the faff out of investing. You pick your risk level, and the experts handle the rest - from choosing the investments to managing them over time. Great for beginners, time-poor professionals, or anyone who wants to invest without becoming a part-time fund manager!
💰 Expert-managed, but can be pricey
These portfolios typically charge all-in fees of 0.5% to 1% a year, which covers the cost of managing your investments. Robo advisers tend to sit at the higher end of that range, but you’re paying for automation, ongoing rebalancing, and a plug-and-play experience. This might be worth it to you if you don’t want the admin, but not ideal if you're laser-focused on keeping your costs low.
📊 Risk levels to suit your goals and timeframes
You can choose from portfolios labelled things like 'Cautious', 'Balanced', or 'Adventurous, depending on how comfortable you are with market ups and downs. As a rule of thumb:
If you’re investing for 10+ years, a higher risk option could deliver better returns
For 5–10 years, a middle-of-the-road approach makes sense
Under 5 years? You might want to stick with a low risk option, especially if you’re risk-averse
