Keeping it simple

Brokers and advisers assume customers are fascinated with investment. They recommend continual monitoring. But then they would, wouldn't they? The reality is different. While a minority of investors is fascinated with markets, most want the gains without the pain. They want low- or no-maintenance portfolios that they can hold for years, while values, it is hoped, increase.

So if you don't have the time or inclination to keep an eye on your investments, here are some ideas that require no more effort than filing your annual statement.

Chopping and changing is pricey. If you sell a fund each year to buy another, the new fund would have to rise by 5% just to break even.

Rule number one is to invest through a collective investment vehicle such as a unit trust or investment trust. There are many suitable as low-maintenance portfolios. The key to a low-or zero-maintenance portfolio is diversification.

Option One

Start with a global growth investment trust - a mix of international markets and UK assets.

The five largest of these, all more than £1bn in size, are Foreign & Colonial, Witan, Alliance, Scottish Mortgage and Scottish Investment Trust.

All are low-risk vehicles that are suitable as zero-maintenance investments, but they are managed differently. Witan, for example, provides the highest exposure to the UK as 57% of its assets are invested at home.

At the other end of the spectrum, Foreign & Colonial is the most internationally focused of the group with only 35% of its portfolio invested in the UK.

A further advantage of these investment trusts is their very low charges. The annual management charge on all these funds is around 0.3-0.4%, less than a third of typical 1.5% annual charge of a standard unit trust.

Option two

Invest in a fund that contains a number of funds from other fund management houses. These are known as funds-of-funds and are offered by groups including Edinburgh Fund Managers, Jupiter, Rothschilds, Credit Suisse, Henderson, Friends Ivory & Sime and Axa. You are effectively giving an expert the responsibility of managing a portfolio of funds for you. You will have to pay more for this service to cover fees for both the fund-of-fund manager and the manager of the underlying funds. However, most will not cost more than 2% per year.

Option three

A different type of fund-of-fund invests only in that fund provider's own products. Fidelity, Schroders and M&G all offer such investments.

Some advisers will discuss easicare funds. Wai Man Cheung, an independent financial adviser at WMC in Bournemouth, prefers the internal fund-of-funds and recommends M&G Managed Growth. He says this fund, with a zero initial charge, is a cheap way into a highly diversified product.

For investors who prefer to stick with plain vanilla unit trusts, Mick Gilligan, at Killik & Co, the London-based stockbroker, likes Investec Cautious Managed.