Designed as an educational example for long‑term investors who value simplicity over stress, this hypothetical portfolio is intended to show how global diversification can be achieved without a complex strategy. It is not a recommendation, but an illustration of how one might construct and monitor a globally diversified mix of investments over time.
As we move into 2026, this example makes one illustrative adjustment to broaden exposure to property and to show how a long‑term investor might think about compounding wealth over multiple decades.
Portfolio guidelines (illustrative only)
- Low‑maintenance approach, with rebalancing or changes considered no more than once per year (unless unavoidable, e.g. due to corporate actions).
- Constructed for a hypothetical 20‑year‑old UK‑based investor with a £10k lump sum and no need for the money for at least ten years.
- Maximum of ten holdings.
- Designed purely as a teaching example for a UK‑based investor; it does not take account of any real person’s circumstances, objectives or tax position.
2025 results (illustrative performance)
In this example, 2025 saw a total return of 24.9% for the portfolio. For context only, the Vanguard LifeStrategy 100% Equity Fund – a widely used, globally diversified reference portfolio – returned 16.0% over the same period.
This means the hypothetical £10,000 would have grown to ~£12,490 over the year.
|
Investment |
Starting Portfolio Weight |
Performance in 2025 (£, Total Return) |
|
Templeton Emerging Markets Investment Trust |
15% |
43.8% |
|
Aberdeen Asia Focus Investment Trust |
15% |
31.5% |
|
ICG Enterprise Trust |
10% |
27.7% |
|
F&C Investment Trust |
20% |
23.8% |
|
iShares MSCI World Small Cap ETF |
15% |
16.7% |
|
Invesco MSCI World Equal Weight ETF |
15% |
16.6% |
|
Vanguard FTSE 250 ETF |
10% |
10.7% |
|
|
|
|
|
Total |
100% |
24.9% |
For 2026, one new holding – TR Property Investment Trust – has been introduced in this example by reducing the weights to F&C Investment Trust and Templeton Emerging Markets Investment Trust.
TR Property has been an excellent long-term investment for many, having made nearly 3,000% (or 12.1% per year) over the past 30 years. While past performance is no guide to future performance, this is a good track record.
TR Property offers, among other things:
- Exposure to a diversified portfolio of commercial properties.
- Professional management of that portfolio.
- Property valuations which look cheap versus history
In this illustration, 5% is taken from each of F&C Investment Trust and Templeton Emerging Markets Investment Trust, and 10% is allocated to TR Property, resulting in the starting 2026 weights below.
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2026 Portfolio:
|
Investment |
Starting Portfolio Weight |
Description |
|
15% |
Large global companies |
|
|
15% |
Large global companies |
|
|
15% |
Smaller companies from around the world |
|
|
15% |
Smaller Asian companies |
|
|
10% |
Large global companies listed in Emerging Markets |
|
|
10% |
Diversified private equity focussed on developed markets |
|
|
10% |
Smaller UK companies |
|
|
10% |
Diversified UK & European property |
|
|
|
|
|
|
Total |
100% |
|
Links to third‑party websites are provided for convenience and information; inclusion does not imply any endorsement or that these are suitable for any particular investor.
Educational summary
This illustrative portfolio ends up with exposure to several thousand businesses, many properties and a broad spread of assets around the world. It is designed to show how an investor with a multi‑decade time horizon might build a diversified, largely “buy‑and‑hold” portfolio, with minimal changes and an emphasis on letting compounding work over time.
Key concepts illustrated include:
- Diversification across regions (developed, emerging, Asia, UK), company sizes (large, small) and asset types (listed equities, private equity, property).
- The idea of trading infrequently – for example, once a year – to keep costs and complexity low.
- The potential role of less‑represented areas such as smaller companies, Asia, and private equity in a diversified global mix, while recognising that these come with higher volatility and risk.
This is not an attempt to “beat the market” or to present a clever new strategy. It is simply an example of how long‑term investing can be approached in a straightforward, diversified way, without constant tinkering.
Important information and disclaimer:
• This article is for information and educational purposes only. It is not investment advice or a personal recommendation to buy, hold or sell any investment.
• The portfolio and investor described are hypothetical examples. They do not take account of the objectives, financial situation, tax position or needs of any real person.
• References to performance (including any figures such as returns over specific periods) are based on historical data and do not guarantee or reliably indicate future results. Investments can go down as well as up, and you may get back less than you invest.
• The author has personal and/or professional interests in some or all of the investments mentioned. This may create a conflict of interest.
• If you are unsure about the suitability of any investment for your circumstances, you should seek regulated financial advice.
Sources: Performance data from Bloomberg