Investengine Review – Automated Investment Provider

Hello everyone! Today I’m writing about InvestEngine, a service and app which lets you invest in a range of low cost investment funds easily.

Regular readers will be a little aware that I’m always pro readers making careful investments, but I’ve been quite reluctant to embrace the new wave of retail trading apps. My concern tends to be based around the fact many of these apps also offer access to products I see as too risky for most average investors (like CFD’s and leveraging) and I don’t want to encourage use of those products.

I’m writing about InvestEngine today because their approach is different. InvestEngine offers access to a range of diversified low-fee investment funds focused heavily on equities and bonds. Those funds are from established names with long-standing reputations, and they don’t offer the products that worry me with other apps.

Instead InvestEngine focus on ETF (Exchange Traded Funds) which are baskets of equities and bonds designed to track particular stock market indices or sectors of the investment markets. As the purpose of each ETF is slightly different, you can combine them into something that works as an effective investment strategy for your needs.

The funds and approach of InvestEngine match the principles of The Financial Wilderness in encouraging balanced long term investment and investing as efficiently as possible, and I found a lot to like given that.

As ever – our normal note that we take care with what we write on this site but it is not official “financial advice” and you need to consider if any financial product is right for your circumstances. We always advocate doing your own research. If you’re in doubt about anything, it’s worth consulting a regulated and reputable financial advisor who can provide tailored advice built for you.

And this post is affiliate: This post was written based on personal experiences using InvestEngine as a customer. If you signup to InvestEngine from this post we will receive a small referral fee which in no way affects the service you receive. Per our editoral policy, we always write honestly about our experiences of products – we know how important your trust is to the website.

How does InvestEngine work?

There are two different ways to invest with InvestEngine depending your preference or level of investing experience.

A managed InvestEngine portfolio built for you

If you select that you’d like InvestEngine to build a portfolio for you, the InvestEngine app will run you through a series of questions which are designed to understand what you want to achieve with your portfolio and help you find out what your investment risk profile is – for instance the length of time you intend to invest for and what your approach would be if you encountered a period of market stress. An example below from the InvestEngine app:

This questioning is designed for the InvestEngine app to then match you with ETF’s which match your risk preferences and the weighting between them – you enter the amount you’d like to invest and away you go!

We wrote an article about understanding your investment risk profile here – this explains what the process is trying to achieve and works on the same principles InvestEngine is using.

You’ll also be asked if you want to focus on income (where you receive small regular payouts from the companies you invest in called dividends) or pure investment growth – we wrote in more detail about the dividend vs. growth debate here.

An InvestEngine DIY Portfolio

If you’d prefer to do things yourself, InvestEngine also has the option to select from their full range of ETF’s and build your own portfolio.

If you’re going down this route you can scroll through the full list of ETF’s and see further information about each by clicking on them. You simply “add” any that you want to put in your portfolio and once finished can select a specific percentage allocation that you add to each.

Personally I went for the DIY option, and found it simple to select some UK linked Vanguard ETF’s.

Can I use an ISA with InvestEngine?

Yes, you can make use of your stocks and shares ISA through InvestEngine or simply maintain a personal account outside of the ISA structure.

For more details on what an ISA is and why we advocate using them when investing, see our post on ISA’s here.

How much does InvestEngine cost to use?

You’ll pay either one or two fees through using InvestEngine (it depends on your choice of service) but either way the package still adds up to being a very low cost and competitive option.

If you choose the managed for you option you’ll pay a management fee of 0.25% of your investments to cover the cost of the service. You do not pay this with the DIY option, but don’t get the benefit of InvestEngine’s ETF matching to your personal profile which can be a beneficial service.

Both managed and DIY portfolio’s will (indirectly) pay a fee for the ETF’s to the providers you invest in, which is simply deducted from your investment. The specific fee will depend on the ETF you go for, but any of the ETF’s on InvestEngine are low cost options with an average charge of 0.17% per year. As many providers charge a platform fee, it can actually be cheaper to invest in some of these ETF’s via InvestEngine rather than going directly.

You do not pay any other fees on ongoing charges – for avoidance of doubt this includes “per trade” fees or withdrawal fees.

These fees staying low can really benefit you as an investor – remember that if you’re paying excessive fees for the cost of the act of investing it acts as a drag on your return, unless you’re getting extra services for those fees.

Is InvestEngine Safe?

InvestEngine is authorised and regulated by the FCA for it’s activities. InvestEngine is also subject to the Financial Services Compensation Scheme to a value of £85,000 of investments if the firm did fail.

However there are added layers of protection in that any investments or cash you purchase through InvestEngine are held in a segregated account which is specific to you. This is a common in the reputable end of the investment industry and designed to provide reassurance to you.

What this means in practice is that if InvestEngine were to fail, any ETF’s you own or cash balance you’ve invested through the firm is still in a separate account highlighting you as the owner (although in a failure situation, note it may take some time to be accessible).

How do I use InvestEngine?

You can either sign up to use InvestEngine through their website or using the mobile app, both of which I consistently found easy to use.

You can sign up with just your basic details to create an account for free. This will let you experiment with seeing what funds your portfolio could comprise of for both the managed and DIY options (and test if you like the InvestEngine infrastructure) without committing any funds.

If you do decide you want to invest, you’ll need to provide some additional details as part of anti-money laundering checks, say how much you want to invest and away you go!

You can sign up at the InvestEngine website here.

What is the minimum I can invest with InvestEngine?

The minimum investment with InvestEngine is £100. Beyond that you can either invest additional amounts as and when you choose, or set up to pay in a regular amount.

Overall Review of InvestEngine

We genuinely found InvestEngine to be an excellent product.

The range of ETF’s was significant enough that I could operate a number of different strategies as a DIY investor, and when testing out the managed portfolio option I found that I was recommended a portfolio which was in my opinion sensibly constructed for the risk parameters which I put in. An example of the ETF’s below:

Importantly all the ETF’s were well established – I could track back a performance history and assess what the fund’s aim was easily and understand it’s performance history fast. My one concern was that I had to go into each funds Key Investor Information to understand the risk profile, but having had a conversation with InvestEngine as part of research for this article I understand this is being implemented imminently.

I also really liked the fact the app worked on a “percentage portfolio” basis – if one fund makes money faster than another InvestEngine will automatically rebalance your portfolio’s appropriately, and changing strategy is very easy if you want to change in the market where you’re focusing on.

What I also appreciated from my conversation with InvestEngine was the continued development of things to better improve investment performance – for instance, one feature coming very soon is implementing a scan to check if there’s “crossover” between ETF’s in the companies or sectors you’re invested in.

The result is an “investor focused” company – exactly what you want as a user.

Any questions?

If you have any questions about our experiences using InvestEngine or used the service yourself please do comment below and let us know your thoughts!

And that’s it!

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