Adding Stocks To a Portfolio

Adding equities to a fund portfolio can add oomph if you know how

Morningstar.co.uk Editors 10 July, 2013 | 9:00AM
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Our previous lesson looked at adding funds to an equity-focused portfolio to help reduce volatility. Today's lesson covers how equities can improve a fund portfolio. Fund investors may be put off by the idea of choosing equities themselves. After all, many of them invested in funds precisely because they didn't want to do their own stock-picking: They want to keep their investing lives simple. But the effort involved with investing in equities directly can be worth it, for a few reasons.

Equities Can Add Oomph

Crocs, the makers of those popular rubber-like shoes you've been seeing everywhere over the past few years, did well for shareholders in 2007, for example, posting close to an 80% return. Try getting that kind of result from a fund. But before you get too excited, you should know that Crocs stock would have returned much more had it not lost 42% in the last three months of that year.

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.

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