AJ Bell ramps up risk with global growth portfolio

AJ Bell ramps up risk with global growth portfolio

AJ Bell has expanded its managed portfolio service (MPS) for advisers to target investors with a bigger appetite for risk. 

The new Global Growth portfolio is the sixth portfolio in the range. It is 100 per cent invested in equities, and is internationally diversified. It will focus on faster growth asset classes such as emerging markets, Asia and global technology.

According to AJ Bell the launch is in response to demand from advisers whose clients have a higher than average tolerance for risk.    

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 AJ Bell recently slashed fees on its managed portfolio service by as much as 40 per cent, taking its annual management charge from 0.25 per cent to 0.15 per cent +VAT.

The new portfolio will also be priced at that level, with the ongoing charges figure of the underlying passive investments coming in at 0.15 per cent to give a total cost of ownership of 0.33 per cent.

Like the rest of the MPS range, Global Growth is benchmarked against Distribution Technology’s Dynamic Planner risk ratings and will be managed to stay within risk level eight. The existing portfolios fit Dynamic Planner risk levels three to seven.

Alan Chan, director and chartered financial planner at IFS Wealth & Pensions, said the product’s total allocation to equities means it may not be suitable for many investors.

“With a 100 per cent equity in the portfolio, this is on the complete other end of the spectrum in terms of risk, with significantly higher than average risk,” he said.

“At a cost of 0.33 per cent, this is cheap and probably because it solely uses passives or index trackers. It will probably suit some investors with a very high appetite for risk and other funds, but we tend to find 100 per cent equity is a little too much for most individuals unless they have a very long-term investment horizon, for example, for their pension if they are in their 20s to 40s.”