InvestEngine – Two months in has brought me profit!

I have been invested with InvestEngine now for about two months and I thought it would be right to stop and have a look at how a managed portfolio is working out for me.

Are you thinking about the best stocks and shares ISA for you for 2023/24? You might want to check out my special feature post here to help you decide!

I’m going to compare it to the various global indices to see how it compares over this very short time frame, I’m going to have a look and see how it has compared to the bulk of my own portfolio and finally just talk a little bit about where InvestEngine is going, how they are improving the assets available on the platform so make sure you stick to the end as I’ve got some news on the extension of their sign up offer that you won’t want to miss – https://investengine.pxf.io/PrettyPennyISA

Stay tuned!

Show me the money

So investing is all about making money. Let’s not make any bones about that. More than any other asset, stocks whether it be buying, holding, selling, trading – whatever you want to call it – is all about making money.

The crypto gang will tell you they believe in a project, and they might. If you invest in property you might be attached to that physical building or bit of land. However, Most retail investors will never see a share certificate or whatever, but just numbers on their phones or computer monitors.

I think most people would agree that the stock market generally goes up, so the longer you hold quality stocks or index funds you could assume they will go up in value. The tricky part is deciding what you should buy and how much. When should you sell, re-balance, rethink your strategy – this is what would separate amazing gains from potentially amazing losses if it goes wrong. 

InvestEngine as a platform

So I’ve been trying InvestEngine, and while I have enjoyed the product, the look and feel, ultimately I’m sure everyone wants to know what it’s actually like for making money! So very quickly, I’m not going to go into how invest engine come up with their portfolios, I have another video about the sign up process and portfolios and all that, but suffice to say they take a very diversified approach with a range of ETFs available from various providers. With that in mind, let’s see how my Invest Engine portfolio has been stacking up this last couple of months

So here is my graph from 21st July to 26th September:

A 1.3% increase.

This portfolio is invested in a diverse range of assets:

Some familiar looking candidates in there: S&P 500, FTSE 100, Nasdaq, Emerging Markets, Global small cap but I’ll admit a couple I didn’t know. Wisdom Tree AI, and iShares Aging population were a couple I hadn’t paid attention to before. 

So diving into the WisdomTree AI ETF… it’s all to do with companies in the Artificial Intelligence space. A very interesting area I’m sure you would all agree… let’s just hope this isn’t the start of SkyNet!

Anyway – a that was a quick tangent – overall my portfolio earned me 1.3% in this period, so let’s see what various popular indices, standing alone, would have earned in the same time frame. 

vs FTSE 100

Of course, this is one such tracker that is included in my portfolio, but specifically for the FTSE 100, for the same period of 21st July to 26th September the FTSE100 went from 6998.28 points to 7,051.48 which was a rise of 0.76%. The FTSE 100 is itself a popular index to track, composed of the top 100 companies listed on the London Stock Exchange. A rise of 0.76% isn’t to be sniffed at, but interesting that this particular managed portfolio is beating that over this time frame.

vs S&P 500

Another in my portfolio – the 500 largest companies listed in the US – for the same time period:  4,358.69 to 4,455.48 which is an increase of about 2.23%. This time when looking at the performance it has under performed vs the S&P 500. 

vs VWRL

Finally, how about an all world index. I’ve talked in the past about how an all world index might be the only fund you ever need to invest in! So let’s see my portfolio vs Vanguard FTSE All-World. This particular ETF went from 86.44 to 87.51 representing an increase of 1.23%. In this instance I suspect that the stocks based in emerging markets has probably dragged this down a bit, but still – it’s interesting that Invest Engine, for this particular portfolio and this very short time frame is in front.

By the way I got all these figures from https://uk.investing.com/ You can search for any ticker and view the historical data, very cool and I worked out the percentages with https://www.omnicalculator.com/math/percentage-increase which is another cool site I go back to all the time. Nice!

No Perfect Solution

Anyway, as a brief summary, it goes to show that there is no perfect solution to investing. The nature of global markets are such that they will go up and down based on all manner of factors. If the S&P 500 has a tough month then it’s likely that a more well diversified portfolio could do better. In the same way if the FTSE 100 suddenly has a flyer for whatever reason, it will probably outperform this invest engine portfolio for a given period of time. What I do like about this InvestEngine portfolio is that it appears to be hitting the middle ground. The more diversified you are, the less likely you will be impacted by spikes or dips in particular areas of your investing.

But listen, two months is barely a blip in a what I would consider a proper investing time frame, which I would think is an absolute minimum of 5 years, but really as long as you can make it. Two months is hardly worth talking about at all as a sample time frame but since this was a fairly new account I thought all you nice people might be even a bit interested in something of an update.

Over the past couple of months I have received email notifications from invest engine of rebalancing that has gone on in my portfolio. Of course, this is a managed portfolio, similar to vanguard’s life strategy, if you are familiar with that, which means someone or something is deciding when to reallocate resources to various parts of the investments. Buying, selling, moving around, it’s all happening. My money is being looked after by someone else and someone is making decisions on what to do with it. However, it’s not some random exercise here – these changes are being made based on the answers to the questions I was asked when I signed up. It’s not some scheme some madman dreamt up on a whim, these are changes made on my behalf based on my level of risk tolerance, investing goals, timeframce etc. And of course, I can change the script any time I choose or pull the plug entirely if I want to.

Costs

Of course, there is a fee of 0.25% that goes with this service although it is completely free to use the platform if you want to build and “manage” your own portfolio, whatever kind of managing you might do. You might just buy and hold, you might like to trade – whatever it’s up to you and there are no extra platform charges for this. 

Some of the comments I got from a previous videos and on social media was that there aren’t enough ETFs and assets to choose from. Invest Engine have been adding more and more to the platform as the weeks go by and really boosting what’s on offer to investors. 

Whether this is enough to entice more people to the platform remains to be seen.

What investors want?

I think what people want more than anything is low fees and plenty of choice, and in terms of fees, Invest Engine are certainly hitting the right note in my opinion. However, striking the right balance on what is offered is a tricky subject. On one hand, if you don’t offer enough then the platform looks weak and under-featured and rightly or wrongly, maybe it doesn’t look attractive. Maybe it looks a bit bare and folks thinking about using it are left wondering – what’s the point… the other side of course, if you offer too much then investors get lost in options – analysis paralysis if you like – it can become confusing as to which investments you should put your hard earned money into and it can lead to investors hopping from one asset to another chasing the big returns and often getting burned in the process.

A simple message

In my view InvestEngine are keeping the core message very simple – invest in a diversified portfolio of ETFs and index trackers and I think they are probably getting the balance right for now. Personally though, I don’t have a DIY portfolio with this platform, so I’m only taking a passing interest in what’s being added at the moment. Of course as more assets are added I imagine that gives Invest Engine more scope to adapt my managed portfolios.

So the good news I promised you – Invest engine are extending their sign up offer to the end of the year, so if you thought you might miss out then you are in luck! Their current offer is to sign up and get £25 free when you invest at least £100. You can also refer a friend for another £25 so you can think about building up a nice little pot as you refer your friends. The whole process is easy to follow and I have other videos on the sign up journey so look out for those on the channel, and I’ll link to them here too. It’s easy to follow, no deposit and transaction fees make it easy to start investing with small amounts of money knowing your money won’t be eroded by fixed costs or crazy management fees. 

They are, of course, regulated here in the UK by the FCA and take part in the FSCS so investments are protected up up to £85k. Any questions, give me a shout! Thankyou very much for watching and I’ll see you in the next one!