Choosing the right mix of asset classes
Generally speaking, if you’re willing to take more risk with the goal of achieving a higher level of return from your investment, your portfolio may hold more equities.
As you grow older, your appetite for risk will probably decrease. The general rule of thumb is that the percentage of fixed interest securities (also known as bonds) you hold should be the same as your age. For example, if you’re 58, approximately 58% of your portfolio would be made up of bonds. If you’re 65, then approximately 65% would be in bonds, and so on.
You may want to increase the percentage of bonds you hold if:
- your priority is to have a more secure investment, particularly in the run-up to retirement
- you’re comfortable with lower growth potential in order for your investment to have the potential to generate a more predictable income
No asset class is free from risk. Using the different characteristics of each asset class in a balanced portfolio can help to smooth fluctuations in performance and balance risk.
Prices may fluctuate and you may not get back your original investment.
Equities are shares of ownership in a company. Over the long term, investing in equities can generate higher returns than simply saving in a bank or building society account*, helping you meet your investment objectives.
* Up to £85,000 of your money is secure in a bank or building society, unlike a stocks and shares or fixed interest investment (Financial Services Compensation Scheme as at 31.12.2010).
More on equities
M&G equity funds
Fixed interest securities, also known as bonds, can offer a more predictable income for investors when compared to riskier asset classes, such as equities, and help to bring an important element of diversification to your investment portfolio.
More on fixed interest
M&G fixed interest funds
Investing in commercial property can generate income and capital growth as part of a balanced investment portfolio.
More on property
M&G Property Portfolio
Multi-asset funds invest across a range of assets, thereby offering investors a diversified blend of equities, fixed interest securities, property, cash and currencies in a single portfolio.
More on multi asset
M&G multi asset funds
Convertibles are hybrid securities with features similar to both bonds and equities which can be used to diversify your portfolio.
More on convertibles
M&G Global Convertibles Fund