--- title: Choosing the best ISA portfolio for you - Model portfolios for low to medium risk investors description: Here are two options for medium to low risk investors who are looking to manage the level of risk & volatility in their ISA portfolio. image: https://www.isaco.co.uk/hs-fs/file-17815700-jpg/images/3_isa_portfolios.jpg --- [![investment guidance service](https://www.isaco.co.uk/hs-fs/file-17903709-png/images/template/logo.png)](https://www.isaco.co.uk/) 0800 170 7750Monday to Friday 8.30am - 6.00pm [Client Log-In](http://members.isaco.co.uk/wp-login.php) - [![x](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/x.png?width=24&height=24&name=x.png)](https://twitter.com/isaco_) - [![linkedin](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/linkedin.png?width=24&height=24&name=linkedin.png)](http://www.linkedin.com/company/isaco-ltd) - [![facebook](https://www.isaco.co.uk/hs-fs/file-17902759-png/images/template/icon-facebook.png)](http://www.facebook.com/pages/Isaco/261073283963679) - [![twitter](https://www.isaco.co.uk/hs-fs/file-17903368-png/images/template/icon-twitter.png)](https://twitter.com/isaco_) - [![linkedin](https://www.isaco.co.uk/hs-fs/file-17903004-png/images/template/icon-linkedin.png)](http://www.linkedin.com/company/isaco-ltd) # Choosing the best ISA portfolio for you - Model portfolios for low to medium risk investors Posted by [Stephen Sutherland](https://www.isaco.co.uk/blog/author/stephen-sutherland) on Thu, Mar 15, 2012 @ 01:45 PM - [Tweet](https://twitter.com/share) ![3 ISA portfolios](https://www.isaco.co.uk/hs-fs/file-17815700-jpg/images/3_isa_portfolios.jpg?width=297&height=197&name=3_isa_portfolios.jpg)We all have different attitudes to investment risk. Some people are willing to accept greater risk and volatility in the pursuit of higher returns. Other people are looking for less risk, while still aiming to achieve their personal financial goals. The level of risk and volatility you face is directly linked to where your ISA portfolio is invested. In this post, we'll look at how medium to low risk investors can make a better informed decision around the percentage of their portfolio they use to aim for growth. The rule is simple - the higher the returns, the higher the volatility. To put it another way, the greater returns you aim for, the rockier the ride. Here’s a table that explains how volatility is tied to ‘the quality of the ride’ for investors. | **Aim** | | --- | **Ride quality (Volatility)** High returns Uncomfortable for risk averse investors Medium returns Fairly uncomfortable for risk averse investors Low returns Comfortable for a risk averse investor ISACO’s lead investor of our Investment Guidance Service is classed as an ‘adventurous’ investor and aims for high returns. That means the ride quality can be uncomfortable at times, especially for low to medium risk investors. Take a look at these recent 3 year returns from our lead investor. 3 year* returns: Adventurous investor seeking aggressive growth |   | **Annual return** | | --- | --- | **Cummulative return** Stephen Sutherland 17% 60.5% Nasdaq Composite 16.6% 58.8% FTSE 100 7.9% 25.6% *31st December 2008 - 31st December 2011 ISACO investment performance verified by Independent Executives Ltd Attaining this impressive performance over the last last three years involved periods of increased volatility. If the threat of large price swings over the short-term doesn’t appeal to you, and you’d be willing to aim for a lower annual return in exchange for a smoother ride, you may like my next suggestion. ## A simple way to lower volatility in your ISA portfolio – Moneybuilder Income Fund Instead of investing 100% of your ISA portfolio or pension into quality aggressive growth funds, you can make a split. For example, 50% of your capital could be invested into aggressive growth funds and the other 50% into a quality low risk corporate bond fund. The low risk fund we like is Fidelity’s Moneybuilder Income Fund and it’s the UK’s lowest-cost AAA rated corporate bond* fund. *Source: Morningstar, January 2012 - Income is tax-free if you invest in an ISA or SIPP - Instead of taking income, you reinvest it to boost your capital - Invests primarily in UK corporate bonds The fund is currently managed by a Citywire A rated manager, who has over 25 years experience in the field of fixed income. The fund manager is backed by a large and experienced team of 38 investment professionals, who are dedicated to uncovering the very best bond investments. ## Medium risk investor - 50/50 ISA portfolio split This allocation is suited to people seeking moderate growth from their ISA portfolio. It’s aimed at investors with a medium risk profile whose aim is to outperform the FTSE 100. With this strategy we suggest a 50/50 split of their ISA portfolio. They simply invest 50% of their capital into quality aggressive growth funds and the other 50% into the Fidelity Moneybuilder Income Fund. If you would have followed this strategy over the last three years using ISACO’s lead investor to help choose your aggressive growth funds, your performance would have been as follows: 3 year* returns: Medium risk investor seeking moderate growth |   | **Annual return** | | --- | --- | **Cummulative return** 50%/50% split 14.7% 50.8% FTSE 100 7.9% 25.6% *31st December 2008 - 31st December 2011 ISACO investment performance verified by Independent Executives Ltd ## Low to medium risk investor - 10/90 ISA portfolio split For the low to medium risk investor whose aim is to stay ahead of inflation, we suggest a 10/90 split of their ISA portfolio. With a 10/90 split, they allocate 10% of their capital into quality aggressive growth funds, and 90% of their capital into the Fidelity Moneybuilder Income Fund. If you would have followed this strategy over the last three years, using ISACO’s lead investor to help choose your aggressive growth funds, your performance would have been as follows: 3 year* return: Low to medium risk investor seeking conservative growth |   | **Annual return** | | --- | --- | **Cummulative return** 10%/90% split 12.6% 42.8% Inflation** 3.6% 11.2% *31st December 2008 - 31st December 2011 **Inflation figure calculated from consumer prices index Dec 2009, Dec 2010, and Dec 2011 ISACO investment performance verified by Independent Executives Ltd Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investing in the Funds should be considered a long-term investment. The value of the investment can go down as well as up and there is no guarantee that you will get back the amount you originally invested. Here's a summary of those choices: - Conservative growth - suits low to medium risk investor (10%/90%) - Moderate growth - suits medium risk investor (50%/50%) - Aggressive growth - suits adventurous investor (100%) ### About ISACO We specialise in providing a premium [Investment Guidance Service](https://www.isaco.co.uk/content/investment_guidance) for ISA and SIPP investors with portfolios in excess of £100,000. Our mission is to help investors achieve better performance over the long-term, better protection in falling markets and at a better price. For more information about ISACO and our Investment Guidance Service, please read our [free brochure](https://www.isaco.co.uk/investment-guidance-service/). 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