Today we will consider how investments made in our Innovative Finance ISA (IFISA) stack up against some popular equity funds, bond funds, and major stock indices.
We’ve previously published blogs comparing the LandlordInvest IFISA to Cash ISAs, FTSE indices, and ISAs provided by other peer-to-peer platforms. You can find those posts here:
The investment we will compare is £20,000 invested over 5 years. In this example we don’t need to consider any tax implications on earnings, as the investments are made through either an IFISA or Stocks and shares ISA.
|
Investment |
5 year performance |
Value now |
|
LandlordInvest IFISA |
64.45%* |
£32,889 |
|
Fundsmith Equity I Acc |
72.40% |
£34,480 |
|
WS Lindsell Train UK Equity D Acc |
25.76% |
£25,152 |
|
Vanguard Global Corporate Bond Index Hedged Acc GBP |
2.59% |
£20,518 |
|
Royal London Corporate Bond Y Acc |
11.43% |
£22,286 |
|
FTSE 100 |
8.22% |
£21,644 |
|
FTSE 250 |
2.01% |
£20,402 |
|
S&P 500 |
84.11% |
£36,823 |
Sources: Hargreaves Lansdown and Google Finance. 13 March 2019 to 13 March 2024.
* LandlordInvest yearly average interest 10.46%, compounded annually. See our statistics page for more data.
A key difference to understand is that whilst profits (or losses) from funds and indices are derived from buying at one price and selling at another, investments in LandlordInvest loans pay monthly interest over the loan term with the principal amount being due at maturity. This leads to less volatile year by year earnings and offers a steady income stream that most funds do not offer.
For example, if we compare only the last 3 years, LandlordInvest returns 34.78% which is more than Fundsmith’s 28.32% for the period. The largest contribution to Fundsmith’s overall 5 year earnings of 72.40% came in a strong year more than 3 years ago, and would have been missed by more recent investors. Recent investors to LandlordInvest, however, have achieved steady earnings in line with those of older investors.
Another difference with LandlordInvest is that we offer a range of loans with different risk profiles and different interest rates, so although our average yearly rate is currently 10.46%, investors can potentially earn more or less depending on their risk appetite.
With LandlordInvest, investors lend to professional property investors seeking property finance via bridging loans and development loans. For some examples of these loans please see below, or view our case studies page.
Our blogs are for information purposes only. This content is not financial, legal or tax advice. Should you require any advice in relation to the earnings you make from LandlordInvest we recommend seeking independent professional advice. Links to other sites are provided for your convenience but LandlordInvest accepts no responsibility or liability for the content of those sites or of any external site. The information in this blog is correct at the time of posting.
Don't invest unless you're prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
LandlordInvest Limited is authorised and regulated by the Financial Conduct Authority (FCA) (FRN 660926). LandlordInvest Limited is not covered by the Financial Services Compensation Scheme (FSCS).
Loans provided to borrowers through LandlordInvest are provided solely for business purposes. Loans are therefore not regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974. You should seek independent legal advice if you are in any doubt as to the consequences of the loan not being a regulated agreement under those Acts.
LandlordInvest Limited (Company No. 09245725), registered office 330 High Holborn, London, WC2A 1HL
