5 easy steps to spring clean your investment portfolio

Written by Mark Taylor on 19th Apr 2017


With the new tax year upon us and attention turned to money matters, now is the perfect opportunity to ensure portfolios are in good shape.

It’s all too easy to skip the MOT and dive straight into topping up funds or making new investments. But giving your portfolio an annual health check to make sure it’s still doing what you want is a fundamental part of investing.

Investors would be wise to commit to an investment MOT once a year. Pick a date and stick to it. That way, you won’t be tempted to tinker too often, but this also won’t allow things to drift.

If it’s ISAs in particular you’re looking at, there’s lots more info in our free Stocks & Shares ISA Guide issued in partnership with Good With Money. Simply download it and read through at your leisure.

Here are the best ways to spring clean your investment portfolio.

  1. Analyse your underperforming funds

‘While it’s important to stay invested, and take a long term view, it’s also important to know when to call it a day.

Identify whether your portfolio holds any serial underperforming funds and consider cutting them loose. These are not funds that have had a rough few months, but ones that are consistent bad performers against their benchmark year-on-year, and more tellingly, against their peers. It’s not uncommon to want to hold on to investments that we’ve had for a long period; to wait for the rally. However, sometimes in a drought, it’s best to seek water elsewhere. Morningstar.co.uk  is often a useful source of information.

  1. Check for overlaps

‘Most commonly, ISA portfolios are made of up of a whole host of funds and trusts, many of which may invest in the same stocks. Check whether you have any notable overlaps – you could be building an uncomfortably large position in a single stock simply from owning a handful of funds, which could be impacting your diversification. More annoyingly, you may also be paying twice the amount you need to in fees to invest in one stock.

  1. Closet trackers

If you’re paying active management fees, make sure you’re getting an active management performance. It’s important to check that your active funds aren’t just tracking the index, but are actually making intelligent decisions and earning their worth. If not, you may as well be invested in a similar ETF instead.

  1. Balance it out

The recent rally in equities may have caused a shift in a number of portfolios, causing them to be too stock heavy. The balance of weighting between what you have invested in bonds, and what you have invested in equities, may now be out of kilter. Think about rebalancing your portfolio to keep your risk level on track.

  1. Can you increase your contributions?

The best way to invest is regularly, and direct debits into your ISA are a brilliant way to do this. However, when was the last time that you checked if you could be putting away more?

If you’ve recently had a pay rise, or perhaps set up the payment as a novice investor, with a cautionary amount, you may be able to boost your savings and your earnings by increasing your contributions by a manageable amount. Take the time to think about how much more you could be setting aside.

Don't miss the good stuff!

Sign up for the newest and best green money deals in your inbox every week