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Since 2009, conditions for UK investors have been far from ideal. With interest rates steadfastly set at 0.5%, many are questioning how they can make their money work harder to generate more than meagre returns. We discuss four options, and how they compare in terms of investor returns.


Equities can be profitable but there can also be big swings in value. As previously discussed, it’s best to invest in a diverse portfolio – with a combination of steadier sectors, such as utilities, and more speculative ones, such as homebuilders. Consequently, tracker funds, which provide exposure to an entire index such as the FTSE 100 or FTSE 250 are a popular choice. According to financial data company Morningstar, the iShares FTSE 100 UCITS ETF (Dist) (GBP) tracker has returned on average 6.9% per annum to investors for the past ten years, while the iShares FTSE 250 UCITS ETF (GBP) has returned 11.3% per annum.

While both present attractive returns, these are also long-term averages. The stock-market is incredibly volatile, annual returns will not necessarily be consistent and timing can make a big difference. This volatility and timing risk can be minimised by investing a little every month, something known as pound cost averaging.

Investors willing to push their money, and place their own time and energy into actively trading equities can certainly generate outperformance. However, you just have to look at current hedge fund returns to see that this is easier said than done, even for the ‘experts’.


These have obvious advantages for inexperienced investors. Picking investments requires an understanding of the business, industry, and economic conditions. By investing in a managed fund you are paying a fund manager to do this for you, consequently resulting in higher fees than tracker funds.

Good fund managers can generate substantial returns for their clients – but not all are of an equal calibre. Star fund managers command high fees but still often fail to outperform the market. So while investing through one of these may make you feel more secure, the only certain outcome will be a drag on your returns through the fees you pay.

The huge variety of funds out there mean that it’s incredibly hard to generalise their performance. Data from Interactive Investor indicates that, on average, the top ten performing funds generated 23.29% return for their investors last year. Nevertheless, with the bottom ten returning on average -25.36%, there is clearly a level of risk, and generally managed funds go through multi-year periods of often very good, followed by very poor performance. In short, some managed funds will make your money sprint – but they still demand a level of trust not suited to every investor.


This format enables individual investors to purchase equity in businesses via online peer-to-peer platforms. Many platforms offer opportunities from a whole range of businesses – from micro-breweries to musical production companies – enabling individuals to invest in something they are passionate about, as well as businesses they hope will offer a return. While this can be satisfying, it is not a fool-proof route to riches. The majority of these platforms offer investors a cheap punt (£10 is the minimum stake in many cases) in early stage businesses.

However, if these businesses fall into financial difficulties, equity investors rarely see their funds returned, as they are not offered any protection. Recent research from AltFi Data has revealed that of the 82 UK equity crowdfunded business from 2013, 22% have either gone on to raise funds at a higher valuation or have realised a successful exit, whilst 28% have either failed, or are showing signs of difficulty.


While there are a whole range of bonds available to investors, we issue small corporate bonds via our platform. These are exclusively offered to, and designed specifically for, high net worth, sophisticated, and professional investors. These are self-directed individuals and entities, who appreciate the cost savings that come with removing the middle man.

They also appreciate analysing investment opportunities for themselves and making a judgement on their viability based on their own experience. Through this format, investors access a diversified annual yield of 10.74%, while our business assessment process keeps their original investment as secure as possible.

Investors should feel reassured that even in this low interest environment there are profitable opportunities for yield out there.