1. What are the main types of investment products offered by InvestEngine?
InvestEngine offers two main investment products:
- Managed portfolios - Professionally built and automatically rebalanced portfolios tailored to your risk level.
- DIY portfolios - Self-directed portfolios where you choose and manage your own ETFs.
2. What are the general risks associated with investing?
All investments carry some level of risk. Common risks include:
- Market risk - The value of investments can go up or down depending on market conditions.
- Inflation risk - Inflation may erode the purchasing power of your returns over time.
- Currency risk - Some ETFs hold international assets, and currency fluctuations can affect performance.
- Liquidity risk- Certain investments may be harder to sell quickly without affecting the price.
3. What are the risks specific to Managed portfolios? (Currently unavailable)
Managed portfolios reduce some risks through diversification and professional oversight. However:
- You are still exposed to market volatility.
- Performance is not guaranteed, even with professional management.
- Your portfolio may not match your goals if your risk profile or circumstances change and you don’t update your preferences.
4. What risks should I consider with DIY portfolios?
DIY investors take full control of their portfolio. Specific risks include:
- Investment selection risk - poor ETF choices or lack of diversification can impact returns.
- Timing risk - buying or selling at the wrong time can lock in losses.
- Rebalancing risk - failing to regularly adjust your portfolio can increase exposure to certain assets unintentionally.
5. Are ETFs themselves risky?
ETFs are typically diversified and low-cost, but they still carry risks:
- Market risk, as the underlying assets can fall in value.
- Tracking error, where the ETF may not perfectly match the performance of its target index.
- Issuer risk, especially with synthetic ETFs (though InvestEngine primarily uses physical ETFs).
6. How can I reduce my investment risk?
- Diversify your portfolio across sectors, geographies, and asset types.
- Invest for the long term, which helps smooth out short-term volatility.
- Review your portfolio regularly to ensure it matches your goals and risk appetite.
- Use a Managed Portfolio if you're unsure about making investment decisions on your own.
7. Are my investments protected if markets crash?
InvestEngine does not offer capital guarantees. Your investments can lose value. However:
- Your investments are held securely in your name by a regulated custodian.
- InvestEngine is authorised and regulated by the Financial Conduct Authority (FCA).
- You may be eligible for FSCS protection (up to £85,000) in the unlikely event that InvestEngine fails, but not against losses from market movements.