Asset allocation calculator UK
Learn some key investing principles that will help you building a balanced portfolio
Form filling should take less than 5 minutes
Improve your knowledge to improve future decisions
Only demonstrates generally accepted investing principles
Go back to your profile to edit or review your inputs
Frequently asked questions
Based on your inputs, three profiles with different levels of risk and return
Slower steadier returns than the base mix - less investment risk and bigger cash buffers
Middle-of-the-road asset allocation based on your inputs and the allocation rules below
More aggressive than the base mix - higher investment risk and expected returns
Perhaps the most important factor to consider when thinking about your asset allocation is your risk tolerance.
Our questionnaire indicates a willingness to take risk, and a ability to take risk. This means you have a overall risk tolerance , as it is the lower of the two.
Age
After financial goals and any non-standard investments, we allocate using the 110 rule (110 minus current age gives the percentage in shares).
This shifts your portfolio towards less risky bond investments which have a more stable value as you get older and closer to wanting to draw on your them during retirement.
Profile
The Varbes Asset Allocation calculator is made to demonstrate some key financial concepts - you can carry out a more detailed assessment of your financial position, risk and financial goals which would lead to a more suitable asset allocation.
Because of these limitations, we include three different asset allocation profiles to give you a range of options to consider.
You have selected the base profile, this will mean you follow the standard age and risk based rules (detailed in other sections), and no adjustments will be applied.
Example Portfolios
100% Shares 2010 - 2019
- Average return8.6%
- Best year (2013)20.8%
- Worst year (2018)-9.5%
* We selected the FTSE All Share Index as a representative for the share market
50% Shares / 50% Bonds 2010 - 2019
- Average return7.3%
- Best year (2016)14.0%
- Worst year (2018)-4.6%
100% Bonds 2010 - 2019
- Average return6.0%
- Best year (2011)17.0%
- Worst year (2013)-4.1%
* We selected the Bloomberg Barclays UK Government Bond Index as a representative for the bond market
Frequently Asked Questions
The process of deciding your portfolio's asset allocation is called asset allocation.
Asset allocation is an investment strategy that aims to balance risk and reward by splitting a portfolio’s assets into different asset classes, according to an individual’s goals and risk tolerance.
We use the term asset allocation on this page as we thought it would be more readily understood by newcomers, but if it functionally the same process as asset allocation.
After deciding on an asset allocation, the next stage is deciding on how best to invest within each asset class.
For example, if you have decided to allocate some of your assets to shares, then you may want to compare Index Funds to find for a low cost provider. We also have a Bond Index Funds comparison page.
"Shares", "Stocks" and "Equities" are interchangeable terms for units of ownership of a company.
A company may decide to sell shares to investors in order to raise capital, the investors then become equity shareholders in the business. Shareholders have the opportunity to earn dividends in return, with profit distributions depending on the company’s share price and overall performance.
When trying to meet a 'Shares' allocation from asset allocation, a great way to do this is with a Share Index Fund, as they are a cheap way to get broad market exposure. Please see our comparison page.
Unlike shares, bonds don't give you ownership rights. They represent a loan from the buyer (you) to the issuer of the bond. The issuer agrees to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.
The market value of a bond changes over time as it becomes more or less attractive to potential buyers. The attractiveness can change if the financial health of the bond issuer (e.g. a government or corporation) increases or decreases, or if the bond market conditions change
A company has to make bond payments ahead of any distributions to shareholders, so you won't see as much impact when a company isn't doing as well, as long as it still has sufficient resources to make bond payments.
Bonds that are higher-quality (more likely to be paid on time) generally offer a lower interest rates. Bonds issued by Governments tend to be higher quality than those issued by Corporations. Also, bonds that have shorter maturities (length until full repayment) tend to offer lower interest rates.
When trying to meet a 'Bonds' allocation from asset allocation, a great way to do this is with a Bond Index Fund, as they are a cheap way to get broad market exposure. Please see our comparison page.
For most people, they only need to rebalance their portfolio every six months to maintain a good approximation of their chosen asset mix.
If, however, your financial position changes significantly - say your employment changes or your financial goals shift significantly - it would be prudent to revisit your asset allocation to make sure your level of risk is appropriate for your financial situation.