How to review your investment portfolio… and make it BLOOM

With gardeners now out in force caring for their beloved trees, plants and lawns, investors could do worse than take a leaf out of their book – and apply similar techniques to neglected share and fund portfolios.

As Rob Morgan, of broker Charles Stanley, says: ‘Just like a garden, you have to regularly tend to your portfolio to ensure it grows.’

The basics include weeding out persistently poorly performing investments and sowing the seeds for new, hopefully profitable, ones.

Digging deep: The basics include weeding out persistently poorly performing investments and sowing the seeds for new, hopefully profitable, ones

Digging deep: The basics include weeding out persistently poorly performing investments and sowing the seeds for new, hopefully profitable, ones

Pruning is also important – taking profits, for tax-efficient purposes. And for those who need income, it is sensible to select investments that will bloom often to provide the dividends required. Here’s how to keep your portfolio in tip-top shape.


Just as different plants grow at different speeds, the performance of individual investments will not all neatly move in tandem.

Jason Hollands, a director of wealth manager Tilney, says: ‘A little bit of careful pruning will ensure your portfolio remains balanced, reflects your financial goals, and appetite for risk.’

However carefully you have arranged a portfolio, it can soon get out of shape. Hollands adds: ‘This can mean that a moderate risk portfolio gradually evolves into a higher risk one.’

The first step is to review the allocation made to different assets – such as cash, equities, bonds and property. 

Hollands says: ‘It may mean trimming back on certain assets, partly switching out of some funds while topping up others. For those with new money to invest, the balance of a portfolio can be restored with the careful choice of new investments.’

Morgan agrees. He says: ‘You shouldn’t let one asset dominate. To go back to the gardening metaphor, a well-tended garden usually has plants that flower at different times of the year rather than all at once. 

‘A diversified investment portfolio will do much the same thing with components flourishing at various times and in different conditions – with the ultimate effect of securing consistent long-term investment gains.’

Since 2016, many investors have shunned the UK stock market due to worries about Brexit and have chosen overseas invested funds instead. 

Hollands says: ‘While it is important to be globally diversified, there is also a risk that excessive diversification outside the UK could now leave investors vulnerable to adverse changes in currency exchange rates.

‘In the aftermath of the referendum, sterling slid sharply against the dollar and that benefited overseas investments, particularly US and global funds. But, of course, exchange rates could move the other way, so it is important not to lose sight of the need for a balanced investment approach.’

He adds: ‘The UK market – which is one of the best value and highest yielding developed stock markets at the moment – certainly deserves to represent an important chunk of a UK investor’s portfolio.’

Hollands believes a good sprinkling of UK-listed shares or funds is especially appropriate for income seekers because they tend to be among the world’s more generous dividend payers. 

For those wanting a British-focused income fund, Tilney recommends Evenlode Income, Threadneedle UK Income and JO Hambro UK Equity Income.

Income funds work well for growth seekers too because they can reinvest any dividends and benefit from compounding – annual growth on growth. Beware of holding too many investments as they can make a portfolio unwieldy. Experts suggest at most up to two dozen or so shares and funds.


Every six months, fund broker Bestinvest, owned by Tilney, issues its list of ‘dog’ funds – the ones it believes investors should consider adding to the compost heap because they have grown too large and bloated for its managers to run as successfully as in the past.

It classifies funds as dogs if they have consistently underperformed the market they invest in for three successive years on the trot. The latest ‘Spot the Dog’ list is available at


Succesful investment choices can lead to profits, but also unwelcome tax bills. But these bills can be avoided or mitigated by sheltering a portfolio in an Individual Savings Account. 

Every adult has an annual Isa allowance of £20,000 (children have a smaller Junior Isa allowance of £4,368) – which means any investments held within the wrapper are sheltered from both income tax and capital gains tax. 

A pension also protects investments from the taxman while they grow under the tax-free shield. Those who have investments outside an Isa or pension should consider making use of their annual capital gains tax exemption, which is £12,000 for the current tax year ending next April 5. 

Hollands says: ‘Careful use of this allowance each year to crystallise gains tax free on investments held outside of Isas and pensions can help prevent a big capital gains tax liability build up.’


Just as homeowners pay designers and gardeners to help create and maintain their outdoor green space, it can be wise for investors to do the same. Morgan says: ‘For those without the time, confidence or knowledge to make their own investment decisions, professional financial advice is a must.’

Hollands adds: ‘They can help ensure your portfolio is on track, recommend what to prune and what to add to diversify risk.’

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