Want a ‘low-maintenance’ ISA or SIPP? Ready-made portfolios and multi-asset funds explained – and the crucial questions investors need to ask

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Published: 21 Feb 2022 Updated: 23 Feb 2022

For some investors, deciding how to spread their money across different asset classes such as equities and bonds, geographic regions and sectors is a challenge they relish. Then comes the task of choosing which funds, investment trusts or exchange-traded funds should be purchased to achieve their objectives.

Do-it-yourself investors see it as anything from a bit of a chore that requires some homework, to a highly rewarding hobby that they enjoy.

But many investors don’t fall into these camps: they have neither the time or the inclination to choose, monitor and manage their investments. At the same time, they may be reluctant to seek out a financial adviser. For these investors – many of whom will have come over from the world of saving - there are a range of options including multi-asset funds and ‘ready-made portfolios’.

Multi-asset and ‘balanced’ funds

Investment platforms provide access to many open-ended funds and investment trusts that spread their portfolios across various asset classes. These range from simple ‘balanced’ funds which invest across equities and bonds, through to true multi-asset funds which cast their net across a much wider range of investments alongside equities and bonds - such as index-linked bonds, infrastructure, property, gold and private companies.

Some of these multi-asset funds have a capital-preservation mandate which make them a good one-stop shop for the cautious investor, while some are more adventurous and growth orientated. They have a – or sometimes more than one – fund manager who makes the decisions around how much of the fund to commit to each asset class, and what to buy and sell within those asset classes. They will be buying direct into equities and bonds, or sometimes into other funds – particularly for exposure to specialist parts of the market like renewable energy or private equity.

When selecting such a fund the saver needs to look at the factsheet - and other data and analysis provided by the platform and elsewhere – so they know what the fund holds, and are happy with the objective, the asset allocation and how much risk is being taken.

Jason Hollands, managing director of investing platform Bestinvest, observes that a strategy for some investors is to take a ‘do-some-of-it-yourself' approach by selecting a multi-asset fund as a ‘core’ holding, with some ‘satellite’ holdings in favoured funds to add a bit of ‘bespoke’ to one’s portfolio.

‘Popular multi-asset funds on Bestinvest have long included investment trusts like Personal Assets Trust and RIT Capital Partners,’ says Hollands. ‘Personal Assets Trust takes a cautious approach, investing across equities, index-linked bonds to protect against inflation, physical gold and cash and short-term bonds. RIT Capital Partners invests in listed equities, hedge funds, absolute return funds and private companies.’

Ready-made portfolios

These - sometimes described as ‘funds of funds’ - are another option for a ‘low-maintenance’ ISA or SIPP. However, it is important to understand that the term ‘ready-made portfolio’, while widely used by platforms, is loosely defined and can mean slightly different things between firms.

Hollands explains: ‘Many investment platforms now offer ready-made portfolios as grab-and-go options for investors who are daunted by the sheer choice of funds on offer. These range from simple packages of four or five off-the-shelf fund ideas that investors might choose to buy, through to fully managed portfolios that are designed around a particular risk or goal profile.

‘While scooping up half a dozen fund ideas can help an investor get going, they are then left to keep an eye on these investments themselves and make changes over time. In particular, it is important to rebalance a portfolio periodically as different funds and markets won’t all move neatly in tandem.

'Ready-made portfolios are designed to be a one-stop shop that will provide diversification across different asset classes and markets – but some are a bit more managed in line with a risk and goal profile. The portfolio is periodically adjusted by an investment management team, so investors do not have to be making regular changes themselves.’

RMPs can be categorised according to risk or growth level, or other objectives like income or sustainability. The investor can choose these ‘off the shelf’ or sometimes the platform will offer a simple suitability questionnaire to divine which fits them best. But investors need to ask: What are the underlying investments? What are the fees charged on the portfolio? And is the portfolio’s allocation to different asset classes fixed or ‘dynamic’?

The underlying investments could be in actively managed funds and investment trusts where best-of-breed managers are chosen to try and beat the markets, or low-cost passive index funds and ETFs that replicate general market movements, or a combination of both. Portfolios based on actively managed funds will have higher fees attached to them reflecting the costs of the underlying investments chosen, but many investors are prepared to pay a bit more for the investment expertise behind the funds.

Those containing just index trackers, and rules-based or ‘factor’ funds that hold baskets of investments that meet a set of criteria without the involvement of a fund manager, are likely to be cheaper.

However, there is also the question of whether the allocation within the portfolio to different asset classes is fixed or ‘managed’. Fixed simply means that the portfolio does not change over time: it will maintain a fixed asset allocation, often just to bonds and equities, irrespective of the market environment. This can become problematic when there are major shifts in the global economy and markets.

A dynamic or ‘managed’ portfolio will adapt according to changing market conditions. This means that the portfolio can be tilted between different asset classes to ensure that it continues to reflects its risk profile, depending on the outlook. You would think that you have to pay more for this dynamic approach but Bestinvest is now offering a range of ready-made portfolios - the Smart range - which are some of the cheapest investments of their kind on the market.

The five Smart portfolios – designed to cater to a range of risk appetites from cautious to adventurous (see table below) – are invested across a large number and variety of low-cost passive funds, in order to give exposure to various equity regions and sectors, as well as fixed income assets and gold. Moreover, under the supervision of our investment team, they will flex and adapt according to developments and the outlook in global markets. Traditionally access to this sort of expertise and ongoing management would come at a premium.

But the Smart funds carry an overall ongoing fund costs of just 0.34-0.37% pa, and as the Bestinvest platform fee for holding them is just 0.20% (reducing to 0.1% for accounts over £500k), that means they cost in total just 0.54-0.57% pa. In other words an investor with £10,000 in one of these funds would pay just c.£55 over a year.

This is significantly cheaper than many robo-advisers. Investors can take advantage of these discounted dynamic funds at https://www.bestinvest.co.uk/

The Smart range


Current Asset Mix



Fixed Inc



Tilney Smart Cautious






Tilney Smart Balanced






Tilney Smart Growth






Tilney Smart Adventurous






Tilney Smart Maximum Growth







This release was previously published on Tilney Smith & Williamson prior to the launch of Evelyn Partners.