Principles of Investments 2021

The key to successful investing isn’t predicting the future, it’s learning from the past and understanding the present. We present seven time-tested strategies for guiding portfolios towards tomorrow’s goals.

Investors should start early, invest with discipline and have a plan for their future.

People who are 65 today have a good chance of living to 80 or 90. But studies reveal many of us have not saved enough for our retirement years.

Global Allocation Fund

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The probability of one member of a 65-year old couple living at least another 25 years

Build a strong core with the

And saving more for it

Plan on living a long time

Income required to beat inflation

Bank deposit income

Inflation eats away at your purchasing power

2001

£1,233

£4,893

2021

Income generated from £100,000 of cash savings

Income Builder Fund

Scour the world, find more yield with the

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The purchasing power of cash left on the sidelines, or the amount of goods that your money can buy, could decrease by more than half over a 40-year time horizon if inflation is 2% per year.

A risk-averse saver who decides to keep their savings in cash will no longer earn enough interest to beat inflation at today’s low interest rates.

Cash is rarely king

Equity Income Fund's

The

WATCH VIDEO

Accumulated wealth from £5,000 invested annually growing at 5% a year

The power of compounding is so great that delaying investing by even just a few years, or choosing not to re-invest income, can make an enormous difference to your eventual returns.

Compounding is what happens when you earn returns not only on your initial investment, but also on any accumulated gains from prior years, allowing you to accelerate capital growth over time.

Compounding works miracles

Start early, and re-invest income

AVOID EMOTIONAL BIASES BY STICKING TO A PLAN

Past performance is not a reliable indicator of current and future results

Historical risk vs. return

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Therefore, if you want to target a higher level of return, you have to be willing, and able, to tolerate larger swings in the value of your investments along the way.

The strongest-performing investments since the early 2000s have tended to be those whose prices have been most volatile. Equities, for example have suffered some sharp swings in value, but they have delivered relatively strong annual returns compared to cash left in the bank.

Be realistic about your objectives and what you can achieve

Where U.S. investors are investing

United States global GDP

The United States accounts for only a small fraction of global GDP, yet the majority of U.S. investors are putting their money into U.S.-based assets.

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Though the U.S. accounts for only 1/3 of global capital markets, Americans concentrate 70% of their investments at home

Another costly and common investing bias: investing in what’s familiar.

Don’t let biases—home-country or otherwise—sway your better judgment.

Returns and risks generally go hand in hand

JPIN ETF

Seek a smoother ride in international equity markets with the

of the last 35 years ended in positive returns for UK stocks

Close to

Hedged Equity Fund

Hedge the equity market without timing it with the

WATCH VIDEO

Despite suffering intra-year declines every calendar year since 1986, the equity market still recovered to deliver positive returns over two thirds of the time.

Plan on riding out volatile market periods. While the market’s ups and downs are hard to predict, sharp declines are a fact of life and should be expected.

Keep your head when all about you are losing theirs

Volatility is normal

Global Bond Opportunities Fund

Diversify your bonds with the

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While markets can always have a bad day, week, month or even a bad year, history suggests investors are much less likely to suffer losses over longer periods. It’s important to keep a long-term perspective.

Selling after the market has experienced a large fall is normally the wrong strategy as investors can lock in losses and miss out on the subsequent recovery.

Staying invested matters

Timing the market is difficult

STAYING INVESTED MATTERS

Throughout history, a diversified portfolio of stocks, bonds and other asset classes has helped to limit sharp swings in returns.

Despite a tumultuous ride for investors over the past 10 years, our analysis shows that a diversified portfolio has provided a much smoother ride than investing in stocks alone.

Don’t put all your eggs in one basket

STAYING INVESTED MATTERS

A blend of stocks and bonds has not suffered a negative return over any five-year rolling period in the past 70 years

70 Years

stocks

bonds

While markets can always have a bad day or even year, history suggests investors are less likely to suffer losses over longer periods.

Good things come to those who wait.

67 Years

Get invested, stay invested with the

WATCH VIDEO

Diversification works

Global Allocation Fund

Dive deeper into the data

Download the Principles for successful long-term investing

£133

£2,318

£200,000

£300,000

£400,000

£500,000

£600,000

£700,000

£100,000

Starting at age 25

Starting at age 35

Annualised volatility and returns since 2004

10%

12%

14%

Cash

Global equities

Volatility

Returns

Past performance is not a reliable indicator of current and future results

1-year time horizon

10-year time horizon

Historical returns when investing over different time horizons

Range of annualised returns from a 50:50 mix of stocks and bonds since 1950

49%

-24%

Range of historical returns

17%

49%

-24%

equities pays dividends

conservative approach to

Higher risk, higher return

LEARN MORE

Range of historical returns

Download the Principles for successful long-term investing

For illustrative purposes only

Return

Time

Starting at age 35

Starting at age 25

Diversified portfolio

Stocks

Past performance is not a reliable indicator of current and future results

Download the Guide to the Markets

DIVE DEEPER INTO THE DATA.

EXPLORE THE CHARTS.

Global Allocation Fund

WATCH VIDEO

Get invested, stay invested with the

Diversification works

67 Years

Don’t put all your eggs in one basket

Despite a tumultuous ride for investors over the past 10 years, our analysis shows that a diversified portfolio has provided a much smoother ride than investing in stocks alone.

Throughout history, a diversified portfolio of stocks, bonds and other asset classes has helped to limit sharp swings in returns.

Return

Time

For illustrative purposes only

Diversified portfolio

Stocks

It’s always darkest just before dawn.

By missing some of the market’s best days, investors can lose out on critical opportunities to grow their portfolio. Market timing can have devastating results.

Six of the U.S. market’s 10 best days occurred within two weeks of its 10 worst days.

Fully invested

5.62% RETURN

$29,845

-7.41% RETURN

Missed 60 best days

$2,144

Returns on $10,000 invested in the S&P 500: January 4, 1999-December 31, 2018

Diversify your bonds with the

Global Bond Opportunities Fund

WATCH VIDEO

Timing the market is difficult

Staying invested matters

Selling after the market has experienced a large fall is normally the wrong strategy as investors can lock in losses and miss out on the subsequent recovery.

49%

-24%

Range of historical returns

49%

-24%

17%

Range of historical returns

Historical returns when investing over different time horizons

Range of annualised returns from a 50:50 mix of stocks and bonds since 1950

WATCH VIDEO

Hedge the equity market without timing it with the

Hedged Equity Fund

Volatility is normal

Keep your head when all about you are losing theirs

Plan on riding out volatile market periods. While the market’s ups and downs are hard to predict, sharp declines are a fact of life and should be expected.

Despite suffering intra-year declines every calendar year since 1986, the equity market still recovered to deliver positive returns over two thirds of the time.

Past performance is not a reliable indicator of current and future results

WATCH VIDEO

Seek a smoother ride in international equity markets with the

JPIN ETF

Returns and risks generally go hand in hand

Don’t let biases—home-country or otherwise—sway your better judgment.

Another costly and common investing bias: investing in what’s familiar.

Though the U.S. accounts for only 1/3 of global capital markets, Americans concentrate 70% of their investments at home.

WATCH VIDEO

LEARN MORE

The United States accounts for only a small fraction of global GDP, yet the majority of U.S. investors are putting their money into U.S.-based assets.

United States global GDP

Where U.S. investors are investing

Be realistic about your objectives and what you can achieve

Therefore, if you want to target a higher level of return, you have to be willing, and able, to tolerate larger swings in the value of your investments along the way.

WATCH VIDEO

LEARN MORE

Historical risk vs. return

10%

12%

14%

Cash

Global equities

Volatility

Returns

Higher risk, higher return

Past performance is not a reliable indicator of current and future results

Annualised volatility and returns since 2004

WATCH VIDEO

Start early, and re-invest income

Compounding works miracles

Compounding is what happens when you earn returns not only on your initial investment, but also on any accumulated gains from prior years, allowing you to accelerate capital growth over time.

The power of compounding is so great that delaying investing by even just a few years, or choosing not to re-invest income, can make an enormous difference to your eventual returns.

Accumulated wealth from £5,000 invested annually growing at 5% a year

conservative approach to

The equities pays dividends

Equity Income Fund's

Starting at age 25

Starting at age 35

Starting at age 25

£100,000

£200,000

£300,000

£400,000

£500,000

£600,000

£700,000

There is no guarantee that companies will declare, continue to pay or increase dividends.

Cash is rarely king

A risk-averse saver who decides to keep their savings in cash will no longer earn enough interest to beat inflation at today’s low interest rates.

The purchasing power of cash left on the sidelines, or the amount of goods that your money can buy, could decrease by more than half over a 40-year time horizon if inflation is 2% per year.

WATCH VIDEO

Income generated from £100,000 of cash savings

£351

£873

£6,115

£800

Inflation eats away at your purchasing power

Bank deposit income

Income required to beat inflation

Plan on living a long time

And saving more for it.

The probability of one member of a 65-year old couple living at least another 25 years

People who are 65 today have a good chance of living to 80 or 90. But studies reveal many of us have not saved enough for our retirement years.

Investors should start early, invest with discipline and have a plan for their future.

WATCH VIDEO

Close to 70% of the last 35 years ended in positive returns for UK stocks

Download the principles booklet for your clients

Download the Principles for Successful Long-Term Investing

2000

2020

1-year time horizon

10-year time horizon

Download the Guide to the Markets

Income generated from £100,000 cash savings

2021

2001

£4,893

£1,233

£133

£2,318

Bank deposit income

Income required to beat inflation

2001

£2.318

£133

Bank deposit income

Income required to beat inflation

2021

£1.233

£4.893

Bank deposit income

Income required to beat inflation

Past performance is not a reliable indicator of current and future results

Watch the video

View the guide

STAYING INVESTED MATTERS

View the guide

AVOID EMOTIONAL BIASES BY STICKING TO A PLAN

View the guide

STAYING INVESTED MATTERS

View the guide

Watch the video