Performance and Costs
On this page, I provide updates on the performance and costs of the example portfolios I’ve set up using my own money.
£10,000 Higher-Risk Rated Portfolio – Return since inception May 2023, +17.60% gross, +15.48% net.
Performance on the three portfolios I set up in June 2024 will be included here in September 2024.
£10,000 Higher-Risk Rated Portfolio – est. May 2023
Weighted Ongoing Charges Figure of 0.09%
On 11th May 2023, I set up a £10,000 (i.e., “Tier 2”) Higher-Risk Model Portfolio in a Self-Invested Personal Pension (“SIPP”) hosted by one of the platforms that came out on top in the comprehensive review of platforms in my book; get a free copy of this review and regular updates here. The £10,000 included a 1% allocation to cash which is not included in the following table.
Here are the updates on performance and costs.
| Date | Current* Value | Total Costs | Gross £ change | Gross Return | Net £ change | Net Return |
|---|---|---|---|---|---|---|
| 28/08/24 | £11,620.76 | -£209.76 | +£1,739.36 | +17.60% | +£1,529.60 | +15.48% |
| 29/07/24 | £11,590.70 | -£196.77 | +£1,709.30 | +17.30% | +£1,512.53 | +15.31% |
| Rebalance | ||||||
| 28/06/24 | £11,769.61 | -£171.81 | +£1,888.21 | +19.11% | +£1,716.40 | +17.37% |
| 29/05/24 | £11,390.22 | -£158.82 | +£1,508.82 | +15.27% | +£1,350.00 | +13.66% |
| 29/04/24** | £11,297.72 | -£145.83 | +£1,416.32 | +14.33% | +£1,270.49 | +12.86% |
| 29/03/24 | £11,499.77 | -£139.84 | +£1,618.37 | +16.38% | +£1,478.53 | +14.96% |
| 29/02/24 | £11,141.88 | -£133.85 | +£1,260.48 | +12.76% | +£1,126.63 | +11.40% |
| 31/01/24 | £10,845.57 | -£127.86 | +£964.17 | +9.76% | +£836.31 | +8.46% |
| 08/01/24 | £10,535.24 | -£121.87 | +£653.84 | +6.62% | +£531.97 | +5.38% |
| 30/11/23** | £10,370.20 | -£115.88 | +£488.80 | +4.95% | +£372.92 | +3.77% |
| 02/11/23 | £10,088.16 | -£114.89 | +£206.76 | +2.09% | +£91.87 | +0.93% |
| 30/09/23 | £10,211.45 | -£101.90 | +£330.05 | +3.34% | +£228.15 | +2.31% |
| 31/08/23 | £10,235.27 | -£88.91 | +£353.87 | +3.58% | +£264.96 | +2.68% |
| 31/07/23 | £10,361.36 | -£75.92 | +£434.96 | +4.40% | +£359.04 | +3.63% |
| 30/06/23 | £10,093.97 | -£62.93 | +£212.57 | +2.15% | +£149.64 | +1.51% |
| 11/05/23 | £9,881.40 | -£36.95 |
I do not include the cash allocation in these calculations as it was left uninvested
**I changed to the cheaper SIPP plan, for portfolios less than £50k, that cost £0.99 for the first month and £5.99/month thereafter. In April 2024, I put more money into the SIPP so that I could set up a further portfolio. That pushed the total amount above £50k, incurring the monthly fee of £12.99.
My observations so far
- Performance: The performance is positive but a little meaningless as it’s been just over a year since I set up the portfolio. I made small adjustments for the annual rebalance in May 2024; i.e., making sure that my portfolio continues to copy the model or “ideal” portfolio for my level of risk and amount to invest. This allows me to ignore all the fuss and noise that goes on in the world and live my life without thinking about my investment portfolio until the next annual rebalance. Click here to see the step-by-step video of my rebalancing.
- Interest. The company or platform in which I have an investment account pays me a small amount for holding cash. I haven’t included this additional income because it would be confusing. The consequence is that the overall performance is ever-so-slightly better than that shown on the table.
- Costs: The total costs include the £5.99 I was charged for each of the four transactions I made when buying funds to include in my portfolio; total 4 x £5.99 = £23.96.
The costs on this account are slightly higher because it is a SIPP and that requires a bit more admin from the platform. In the case of the platform I’m using here, that means a monthly fee of £12.99 which equates to an annual service charge of £155.88.
However, this company (one of the four I recommend in my review of platforms in the book), has started offering much lower monthly SIPP fee for smaller accounts (this one qualifies) with one or two caveats. I’ve provided more detail in the monthly newsletter.
An ISA or General Investment Account would not incur the same costs.
The costs do not allow for the one-off £50 cashback Interactive Investor gave me. This offer might change. I put this back into my account and thereby earned a government rebate of 25% on it, worth £12.50.
The Ongoing Charge Figure (“OCF”) that each fund takes (hence my 1% allocation to cash to cover these costs) has not yet been charged, hence it is not yet included. The OCF charge should work out at no more than 0.09% of my entire investment i.e., around £9 for the first year. That’s when the cost comparison with banks and investment companies will be stark; for example, a 1% annual OCF (more like what they will charge for active management) would cost around £100. Ouch!
I need to have enough cash on the balance of my account (i.e., not invested, just sitting there) to cover all these costs for 12 months. That’s £155.88 in service fees, £23.96 in transaction fees and £9 OCF which adds up to £188.84. The 2% allocation to cash equates to £200, which covers this comfortably.