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Cash interest explained

You will receive interest on balances in your platform cash account at the prevailing rate.

Embark Investment Services Limited acts as the custodian for investments on the Willis Owen platform and is one of our strategic partners that provides our Willis Owen ISA, GIA, Junior ISA and SIPP.

Embark places cash with a number of banking partners for safekeeping and to provide the potential for you to earn interest on money in your platform cash account. By managing cash in this way, it aims to provide better protection and a higher overall level of interest than if all funds were placed with a single bank.

The rates of interest paid by banks will vary. Embark retains a portion of the interest earned to cover its costs in managing platform cash.

Current Interest Rate

The table below shows the current customer interest rate payable on cash balances along with the amount of interest retained by Embark. The customer interest rate shown is that after accounting for interest retained by Embark:

Date From Customer Interest Rate Interest retained by Embark
25th March 2024 2.46% 1.75% - 2.00%

Embark can change the rate of interest at any time and it reviews the position at least quarterly. Interest is calculated and accrued daily and is credited to your account on the first of each month. If you transfer out, accrued interest is applied at the point of transfer. We will inform you if and when the interest rate changes as soon as is practicable.

Interest retained

The table below shows the yearly equivalent rates of interest Embark expects to pay based on a range of possible yearly interest rates it may earn.

Interest Embark expects to earn Customer Interest Rate Interest retained by Embark
0-1% 0 – 0.46% 0 – 0.54%
1-2% 0.46% – 0.94% 0.54% – 1.06%
2-3% 0.94% – 1.46% 1.06% – 1.54%
3-4% 1.46% – 2.02% 1.54% – 1.98%
4-5% 2.02% – 2.61% 1.98% – 2.39%
5%+ 2.61%+ 2.39%+

Historic Interest Rates

To see details of historic customer interest rates, along with the amount of interest retained by Embark, click here.

Building a diversified set of investments

Once you’ve decided how much risk you’re willing and able to take with your money, it’s time to start the process of designing your investment portfolio. Designing a balanced portfolio to match your chosen level of risk is about choosing different types of investments and blending them together in a way which maximises your potential returns, but which ensures you’re not taking on more risk than you’re comfortable with.

One of the most important things to think about when designing an investment portfolio is diversification. So, what does it mean?

Diversification is a risk management strategy that involves spreading out your money across different investments within your portfolio. It basically means “not putting all your eggs in one basket”.

Why should you diversify your portfolio?

Having a diversified portfolio can help reduce the amount of risk in your portfolio. Owning different types of investments can protect you if one of your investments falls. This is because different kinds of investments do not necessarily behave in the same way. By diversifying your portfolio across different types of investments or geographical regions for example, you could help to smooth out your investment returns, although remember with investing there are no guarantees.

Deciding on the structure of your portfolio

The first step in designing your portfolio is to decide what proportion of your money to allocate to each of the different asset classes. We call this ‘asset allocation’.

Once you’ve decided on the broad asset allocation of your portfolio, you can then look to diversify even further within each asset class. For example, with shares, you could look to invest in British, Japanese or US shares among others. While fixed interest securities, you could look for a mix of corporate bonds or government bonds. There are many ways to diversify your portfolio.

Below are some examples of portfolios from investors who have different risk tolerances. It shows that no matter what risk tolerance you have, you can still build a diversified portfolio. Please note, that none of the examples should be considered as a recommendation of what might be suitable for you.
Cautious Portfolio

Tips to help you diversify your portfolio

Here are some useful suggestions which may help you to diversify your portfolio:

Funds - Buying and holding funds is a good start as these will provide you diversification on a particular asset class or investment strategy, so instead of just investing into one company, it can invest in a range that is aligned with the fund's objectives. In addition, it can also help reduce risk - if you have money invested in a fund no single company can hurt you too much. Your portfolio value will still rise and fall, but those swings will be smaller because they’ll be based on the collective movement of an entire group of companies instead of just one.

Asset classes - It is important to have your portfolio invested in different asset classes because they perform differently in different market conditions. You wouldn't want to have your portfolio invested in just one asset class, no matter how diversified you are within it, as you will still be exposed to the same risks that affect that particular asset class.

Go global - Having exposure to the rest of the world and not just one country’s stock market will help boost diversification. This gives you the opportunity to take advantage of different geographic regions with superior investment prospects. By sticking to your home market, you may miss out on growth or, indeed, income opportunities elsewhere.

Look at sectors - How exposed your portfolio is to different sectors is crucial to diversifying your portfolio. Companies in the same sector can face the same challenges, no matter what country they operate in. If that sector fails to perform, your overall portfolio may not perform well.

Use different strategies - Fund managers tend to have different investment styles but if you build a portfolio full of growth funds or income funds then your portfolio may not be very well diversified. It will perform well in certain circumstances but not in others. You can also spread your investments out between active and passive funds. Passive funds are cheaper and can give you low-cost exposure to one country or region, whereas active funds have higher fees but benefit from the skill of a fund manager who can allocate into particular areas of the market they feel will perform best.

Balancing your portfolio - If you have too many funds then you may find that no one fund will make a meaningful contribution to the performance of a portfolio. Typically, we would suggest a diversified portfolio can be achieved with as little as 10 funds. It is also recommended that you regularly review your portfolio to make certain that it remains suitable for your needs.

As you can see there are many ways to diversify your portfolio. No matter how much risk you are willing and able to take, you can still have a diversified portfolio. However, there is no magic formula to diversification and everyone’s goals and circumstances are different.



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