The average investor beat professional fund managers by 6.5 percentage points over the past two years.
The average investor is up 39.7 per cent during the period, compared with 33.2 per cent for the IA mixed investment 40-85 per cent shares sector, according to Interactive Investor’s latest private investor performance index.
II customer performance compared to indices to March 31 2022
| IA Mixed Investment 40-85% Shares | Average II customer | FTSE World Total Return | FTSE AllShare Total Return | FTSE 100 Total Return | S&P 500 Total Return |
3 months | -3.7% | -3.6% | -2.0% | 0.5% | 2.9% | -1.9% |
6 months | -1.0% | -1.0% | 4.8% | 4.7% | 7.8% | 8.5% |
1 year | 5.3% | 5.4% | 14.9% | 13.0% | 16.1% | 21.2% |
2 years | 33.2% | 39.7% | 60.8% | 43.2% | 41.5% | 70.3% |
27 months | 12.9% | 10.8% | 34.8% | 7.2% | 7.8% | 46.3% |
Source: Interactive Investor, Morningstar
However, over the past 27 months, since January 2020, the mixed investment sector has outperformed Interactive Investor’s average customer by over 2 percentage points.
When broken down by age, private investors between 18 and 24-years-old have seen the highest returns over a 24 month period.
The age group saw returns of 43.2 per cent, compared with 40.6 per cent for 25-34-year-olds and 40 per cent for 35-54-year-olds.
Performance of II customers, by age bracket
Age | 27 months | 24 months | 12 months | 6 months | 3 months |
18 - 24 | 16.1% | 43.2% | 4.1% | -2.5% | -5.5% |
25 - 34 | 14.8% | 40.6% | 4.5% | -1.7% | -4.3% |
35 - 44 | 14.0% | 40.0% | 5.0% | -1.0% | -3.5% |
45 - 54 | 12.3% | 40.1% | 4.7% | -1.4% | -3.8% |
55 - 64 | 10.2% | 39.1% | 4.9% | -1.4% | -3.8% |
65+ | 9.5% | 39.5% | 6.4% | -0.4% | -3.2% |
Source: II
Kyle Caldwell, collectives specialist at Interactive Investor, said whatever age you are starting on your investment journey, the path never runs smoothly.
“Don’t let short term blips throw a well-diversified portfolio off course,” he said.
Caldwell highlighted how 18-24-year-olds have on average 32 per cent of their portfolios in investment trusts, versus an overall average of 22 per cent.
“Investment trusts can gear, which can enhance returns – great when markets are rising, as they hope to long term; but less so when markets suffer a dip.
“When markets fall gearing leads to greater losses per share- the average investment trust is currently geared by 7 per cent, according to the AIC.”
sally.hickey@ft.com
