Hi,
I actually have a managed investment account and started it in March last year. While appreciating that the world hasn’t exactly been thriving over this time, coupled with the fact that I have chosen an account with a 75.2/24.8 balance, I’m disappointed that over this time the account is currently sitting at a loss of -5.67%.
Given the account is managed, I was hoping I’d at least be at break even. Am I doing something wrong? Or will InvestEngine look like geniuses when the world recovers? 
A rough benchmark we can compare a 75/25 portfolio against might be the broad Morningstar category: “GBP allocation 60–80% equity”.
Here it is. (Please ignore the blue line for “Vanguard LifeStrategy 80%” and just pay attention to the red line. I used the Vanguard fund for charting just to get at the benchmark.)
Depending on when in March 2022 you take as the starting point, the performance of “GBP allocation 60–80% equity” right now ranges from slightly ahead to slightly behind. In all likelihood, the InvestEngine 75/25 portfolio is close to that.
If your young enough, maybe just think a simply S&P 500 fund, then look at stocks/bonds split profile when you get closer to retirement.
In the first 2021 lock down, i changed from managed funds at HL, to Vanguard S&P 500, if I use the FT Fund comparision site, it was a very good decision. https://markets.ft.com/data/funds/uk/compare
I know someone that has Handelsbanken Bank Fund it has made -5 in 5 years, when I showed them what they would have got in the S&P 500 and also the fees, they were very surprised.
I am not currently in any bonds, but I seem to remember they got hammered with the Truss mini budget ?
Thanks
That is why I said if your young enough, so you have time to take the ups and downs.
Try watching Is the S&P 500 All You Really Need to Invest in? - YouTube to learn more and definately watch at 5:14 Is the S&P 500 All You Really Need to Invest in? - YouTube As that talks about managed funds vs index funds.
Thanks
It depends on the ETF that has been planned in the portfolio. Incase if more thematic fund has been chosen then we need to wait for the normal market scenario…
Similar situation I faced earlier in my DIY portfolio but I changed the strategy to invest mainly on index funds in US(S&P 500, NASDAQ & russell 2000) and UK ( FTSE 100 & 250), which is now in green 7%.
Should you be worried? In a word, no.
I have recently transferred a managed portfolio (84% equities, 14% bonds, 2% cash) with a different provider to a DIY one with IE. For perspective, my portfolio fluctuated from highs of +2% to lows of -16% over the past year. Yet, I had actually managed to make a profit (albeit a very small one) when I transferred my ISA earlier this month. The S&P 500 was down at -20% at one point, but has since made gains. The points I am making are that equities are subject to high volatility all the time and an arbitrary timeframe such as 1 year can lead to misleading interpretation as that -5% won’t have been consistent throughout that period and it will most likely have followed a similar path to the above. You are better of evaluating how well your portfolio has performed since it’s lowest point.
I have some personal advice below on how to evaluate and respond to your portfolio performance below, if you’re interested (not professional advice, just my opinions on how I see your situation and what I would do).
Evaluating your portfolio performance
Note: Professional Fund Managers can be wrong too. Particularly, if unexpected events happen. They may also change their outlook throughout the year to respond to these events, but they are useful as a guide of what to expect/ or what is expected to happen.
The breakdown shows:
Last 12 months: -5%
Jan 1 22 - Dec 31 22: -11.8%
Since Mar 22 (when you opened your portfolio): -3.4%
Note: the data is only up until 01/02/23 and they have a management fee of 0.75% and a total fee of 1.04% including TER and market spread which eats into returns. Taking this into account, your portfolio has performed at least on par and/or perhaps slightly better given that IE’s management fee is only 0.25%. Hopefully this is reassuring to you.
Advice/ Guidance
Firstly, just to be clear, I am not a financial/investment advisor. I am just another investor and the ideas I share below are purely my own opinion and reflect how I think about the situation as someone who self-manages a riskier portfolio.
Whilst emotionally it may feel like a loss, objectively-speaking, you haven’t ‘lost’ anything [although loss aversion is a bit more complex than I have stated here] (see: loss aversion & risk aversion) . Not yet. It’s a ‘paper loss’, but you still own the same number of financial assets (shares in the underlying ETFs). It only becomes a realised or actual loss if you decide to sell now. All that -5% represents is the difference between your average purchase price for each individual security in your portfolio and the current market price for each security at a fixed point in time, and one year is a very short fixed point in time, particularly, if, like you say, the markets are experiencing high volatility during that time period. It’s the reason why investing should be for at least 5 years, but ideally at least 15-20 years so that you can ride out periods of volatility.
But I think that you are asking the wrong question.
You should be asking the following questions:
What is my investor profile & psychology? This will have the single biggest effect on the performance of your portfolio. If you properly understand your psychology and how you might react to certain events, then you can use this to determine the asset allocation & security selection of your portfolio. So if you are risk averse, you will have a lower weighting to equities and a higher weighting to cash and bonds and vice versa, if you are risk tolerant. If your portfolio does not reflect your investor profile then you may sell prematurely when your portfolio is down, thereby, cementing your losses (risk averse), or you may see reduced performance if you are risk tolerant and are underweight towards equities.
Try researching cognitive/ behavioural biases and fallacies to get a better understanding of how you think. We all have cognitive biases and are influenced by them to a greater or lesser degree, so by better understanding what they are and when they might have a greater effect on you, you are better able to recognise then in real-time, and either reduce their effect or avoid them altogether, thereby improving portfolio performance by avoiding common pitfalls.
Am I okay with the level of risk in my portfolio? Does it reflect my investor profile or has my profile changed? Higher allocations towards equities tends to be riskier as they experience greater price volatility, so if a minor drop of -5% causes you anxiety, how will a drop of -10% (market correction) or -20% (considered the start of a bear market) make you feel? These are fairly regular events so you should expect them to happen during your investing lifetime. During the Great Financial Crisis, the S&P 500 dropped -46.13% from October 2007 to March 2009, so you have to consider how you would react in these kind of events too and whether you could manage that. If you are honest with yourself and feel it would cause you too much anxiety, then you should speak with Invest Engine about moving you to a lower risk portfolio (one with a smaller allocation to equities). Behavioural Finance is a whole field dedicated to studying our financial behaviour if you’re interested in knowing more.
Will I need to access money in my portfolio in the short-term (within the next 3 years?) If you need to access your portfolio in the short-term, then you should have a lower risk portfolio, because your investor strategy has changed from wealth creation to wealth preservation and you need greater certainty about what your portfolio value will be when you decide to disinvest/withdraw. Conversely, if you do not expect that you will need to access your money in the short-term, you can afford to take on greater risk, so price volatility in the short-term shouldn’t concern you much as it will ease out over the long-term, and instead you can look at it as an opportunity to buy the same shares at a lower price than you would have done.
Regardless of your risk profile, make sure that you have an emergency fund in an easy-access account. We all have unexpected life events such as job loss, increase in household bills, divorce etc. so an emergency fund would reduce the pressure to access your portfolio and sell at an inopportune time.
As an example, of answering the questions above, I would view your situation differently. I have a long-term time horizon (25-30 years), I have built an emergency fund to cover unexpected costs which I am continuing to add to, alongside investing, so I do not expect that I will need to access my portfolio in the short-term, I have some understanding of my psychology which has been tested in volatile market conditions (portfolio down -16% at several points over the past year) which I managed well (i.e. I wasn’t worried and continued to invest regularly), so I have confidence that my portfolio matches my investor profile and I am reasonably confident that I would react similarly in severe, sharp shocks/ market crashes (Great Financial Crisis, Covid-19 Pandemic crash) although I remain aware that I am yet to be tested in those situations so I still retain an element of uncertainty. Therefore I would see your situation as an opportunity to buy low (or lower, considering that equities are currently overvalued) in the reasonable expectation that they will increase in value in the long-term (although I am aware that past performance is no guarantee).
So to translate this to if I had your managed portfolio, I would either continue to invest regularly as normal or double down and invest a larger amount each month if I can. However, your answers to the questions above will determine the conclusion you draw and what action, if any, you should take. Please don’t take what I would do as an indication about what you should do.
I hope that this has helped a little 
Excellent answer and contribution to the shared debate here. Thanks for posting. I’ve ridden this particular horse since the early 90’s and there has been some interesting races along the way. Dot com, GFC and so on. I wish ETFs had been available back then but they weren’t. For me it really does come down to time in the market. That and not being swayed by the likes of crypto and Enron.
Good luck
