Have you got a lump sum to invest for retirement but don’t want to put it into a pension?
Our Long-term Growth Portfolio is designed to grow your capital into a heftier lump sum while you keep control of your investments.
The lump sum generated could be re-invested to provide more capital growth but is primarily meant to be used to buy an income on retirement to top-up existing pension entitlements.
Investing for the long-term only
The Long-Term Growth Portfolio is designed on the basis that no capital will be drawn on for at least 15 years as 70% of its assets are in shares.
This portfolio is intended for someone with 15 years or more to retirement, who plans to use all the money to generate retirement income and is sure they will not need to draw on the capital for at least 15 years.
At retirement, some of the investments will need changing in order to generate a higher income. The portfolio’s aim is growth. I explain the reasoning behind the choice of investments and asset classes below the table.
All these funds can be purchased via fund supermarkets. Most of these funds are included in our Best Buy tables. Each fund sector is reviewed every six months and you can find comment on the sectors and funds in our Investing channel.
The supermarkets give you access to the latest monthly fund factsheets. For a growth portfolio, we recommend buying accumulation units where any income is automatically reinvested in more units.
The £20,000 Long Term Growth Portfolio
| Asset Class | Investment | Amount | % of total |
| Cash | | Nil | 0 |
| Fixed Rate | | 2,000 | 10 |
| Aegon Global Bond | 2,000 | 10 |
| Property | | 4,000 | 20 |
| Standard Life Select Property | 2,000 | 10 |
| M&G Property Portfolio | 2,000 | 10 |
| Shares | | 14,000 | 70 |
| UK (36%) | Standard Life UK Equity High Income | 2,000 | 10 |
| Jupiter Income | 2,000 | 10 |
| AXA Framlington UK Smaller Companies | 2,000 | 10 |
| Invesco Perpetual UK Aggressive | 1,200 | 6 |
| Overseas (40%) | M&G International Growth | 2,800 | 14 |
| Jupiter Financial Opportunities | 2,000 | 10 |
| Legg Mason Japan | 1,000 | 5 |
| Artemis European Growth | 1,000 | 5 |
| Total | | 20,000 | 100 |
Aegon Global Bond - Aegon have assembled an impressive team of fixed-interest managers and their funds have produced above-average performance. Fund manager David Roberts will ‘go-anywhere, buy anything’, and aims for steady returns from bonds, not (as most other bond funds do) a stable income.
Standard Life Select Property - Launched in Autumn 2005, this fund invests in both physical property and in property shares in the UK and overseas. It currently holds about three-quarters of its assets overseas. As a large property investor Standard Life has a highly experienced management team.
M&G Property Portfolio - M&G is owned by the Prudential and the M&G Property fund managers look after several billions worth for their parent company. This is a ‘bricks and mortar’ fund investing in UK shops, offices and warehouses. The fund is conservatively managed by John Cartwright.
The UK-focused equity fundsStandard Life UK Equity High Income - Manager Karen Robertson aims for long-term growth in capital and income from investing in UK shares. This and Jupiter Income should be the steadiest performers of the share-investing funds in this portfolio.
Jupiter Income - Manager Tony Nutt has one of the best long-term records in the sector and his emphasis on growing dividend income should ensure healthy long-term capital growth.
Invesco Perpetual UK Aggressive &
AXA Framlington UK Smaller Companies - These strongly growth-focused funds should achieve more rapid capital growth, but will also suffer bigger falls in market downturns.
The overseas-focused equity fundsM&G International Growth - Manager Graham French will go anywhere, buy anything for this fund, largely ignoring geography (except that there is no investment at all in the UK).
Jupiter Financial Opportunities - Philip Gibb’s one-minded focus on one of the biggest investment sectors has produced excellent results and the growth of emerging markets should present him with plenty more profit potential.
Legg Mason Japan - Hideo Shiozumi tends to produce growth in spectacular bursts by selecting high-growth smaller companies and a stronger domestic economy should provide the right conditions for success.
