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Cash interest explained |
You will receive interest on balances in your platform cash account at the prevailing rate.
Embark Investment Services Limited acts as the custodian for investments on the Willis Owen platform and is one of our strategic partners that provides our Willis Owen ISA, GIA, Junior ISA and SIPP.
Embark places cash with a number of banking partners for safekeeping and to provide the potential for you to earn interest on money in your platform cash account. By managing cash in this way, it aims to provide better protection and a higher overall level of interest than if all funds were placed with a single bank.
The rates of interest paid by banks will vary. Embark retains a portion of the interest earned to cover its costs in managing platform cash.
Current Interest Rate
The table below shows the current customer interest rate payable on cash balances along with the amount of interest retained by Embark. The customer interest rate shown is that after accounting for interest retained by Embark:
| Date From | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 25th November 2024 | 2.3% | 1.75% - 2.00% |
Embark can change the rate of interest at any time and it reviews the position at least quarterly. Interest is calculated and accrued daily and is credited to your account on the first of each month. If you transfer out, accrued interest is applied at the point of transfer. We will inform you if and when the interest rate changes as soon as is practicable.
Interest retained
The table below shows the yearly equivalent rates of interest Embark expects to pay based on a range of possible yearly interest rates it may earn.
| Interest Embark expects to earn | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 0-1% | 0 – 0.46% | 0 – 0.54% |
| 1-2% | 0.46% – 0.94% | 0.54% – 1.06% |
| 2-3% | 0.94% – 1.46% | 1.06% – 1.54% |
| 3-4% | 1.46% – 2.02% | 1.54% – 1.98% |
| 4-5% | 2.02% – 2.61% | 1.98% – 2.39% |
| 5%+ | 2.61%+ | 2.39%+ |
Historic Interest Rates
To see details of historic customer interest rates, along with the amount of interest retained by Embark, click here.
Equity Styles Explained |
Market capitalisation is an indication of the size of the companies being invested in. It is calculated by multiplying the number of shares issued by the company by the current share price. Market capitalisation is divided into ‘large’, ‘medium’ or ‘small’ according to the below:
Large – Companies that have a market capitalisation greater than $10 billion.
Medium – Companies that have a market capitalisation between $2 billion and $10 billion.
Small – Companies that have a market capitalisation below $2 billion.
Companies can be categorised as ‘value’, ‘blend’ or ‘growth’ as defined below:
Value – Companies that are considered to be trading at a share price below what their fundamentals would suggest.
Blend – Companies that do not exhibit solely value or growth characteristics.
Growth – Typically well-established companies which are considered to have above average prospects for long-term growth.
Equity Regions Explained |
Equity region indicates in which countries the underlying shares within your portfolio are listed.
USA – Companies listed on a stock market in the USA.Canada – Companies listed on a stock market in Canada.
Latin America – Companies listed on stock markets in the Caribbean, Central America and South America, such as Mexico, Brazil and Argentina.
United Kingdom – Companies listed on a stock market in the United Kingdom, Guernsey, Isle of Man and Jersey.
Eurozone – Companies listed on stock markets in countries which have the Euro as their official currency, such as France, Germany and Spain.
Europe ex Eurozone – Companies listed on stock markets in western European countries which do not have the Euro as their official currency, such as Denmark, Sweden and Switzerland.
Europe Emerging – Companies listed on stock markets in European emerging markets, such as Poland, Russia and Turkey.
Africa – Companies listed on stock markets in African countries, such as Egypt, Nigeria and South Africa.
Middle East – Companies listed on stock markets in Middle Eastern countries, such as Israel, Qatar and Saudi Arabia.
Japan – Companies listed on a stock market in Japan.
Australasia – Companies listed on stock markets in Australia and New Zealand.
Asia Developed – Companies listed on stock markets in developed Asian countries, such as Hong Kong, Singapore and Taiwan.
Asia Emerging – Companies listed on stock markets in emerging Asian countries, such as China, India and Thailand.
Equity Sectors Explained |
Cyclical – Companies which operate in industries that are considered to be significantly affected by economic shifts. When the economy is prosperous, these industries tend to expand and when the economy is in a downturn they tend to shrink.
Basic Materials - Companies that manufacture chemicals, building materials and paper products. This sector also includes companies engaged in commodities exploration and processing.
Consumer Cyclical - This sector includes retail stores, auto and auto-parts manufacturers, restaurants, lodging facilities, specialty retail and travel companies.
Financial Services - Companies that provide financial services include banks, savings and loans, asset management companies, credit services, investment brokerage firms and insurance companies.
Real Estate - This sector includes companies that develop, acquire, manage and operate real estate properties.
Sensitive – Companies that operate in industries that ebb and flow with the overall economy, but not severely. Sensitive industries fall between defensive and cyclical, as they are not immune to a poor economy, but they also may not be as severely affected as cyclicals.
Communication Services - Companies that provide communication services using fixed-line networks or those that provide wireless access and services. Also includes companies that provide advertising & marketing services, entertainment content and services, as well as interactive media and content provider over internet or through software.
Energy - Companies that produce or refine oil and gas, oilfield-services and equipment companies and pipeline operators. This sector also includes companies that mine thermal coal and Uranium.
Industrials - Companies that manufacture machinery, hand-held tools and industrial products. This sector also includes aerospace and defence firms as well as companies engaged in transportation services.
Technology - Companies engaged in the design, development and support of computer operating systems and applications. This sector also includes companies that make computer equipment, data storage products, networking products, semiconductors and components.
Defensive – Companies which operate in industries that are relatively immune from economic shifts. These industries provide services that consumers require in both good and bad times.
Consumer Defensive – Companies that manufacture food, beverages, household and personal products, packaging, or tobacco. Also includes companies that provide services such as education and training services.
Healthcare – This sector includes biotechnology, pharmaceuticals, research services, home healthcare, hospitals, long-term-care facilities and medical equipment and supplies. Also includes pharmaceutical retailers and companies which provide health information services.
Utilities - Electric, gas and water utilities.
Product Involvement Explained |
Product Involvement metrics measure the percentage of a portfolio's assets exposed to a range of business areas and activities. For example, if a fund's involvement in Animal Testing is 20%, that means 20% of the fund's assets are invested in companies involved in Animal Testing.
Exposure percentages are calculated by summing the weights of a portfolio’s holdings in the companies involved in each area. In most cases a company is considered ‘involved’ in a certain area if it's revenue from that area exceeds a certain minimum threshold. In other areas, for example animal testing, abortion, contraceptives and human embryonic stem cell research, there is no revenue threshold such that if the company has any involvement at all in these areas, it will be considered involved. If a company is considered involved in an area, the entire weight of that company in a portfolio is counted when determining the overall percentages shown.
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ESG Pillars Explained |
Morningstar's ESG Pillar Scores help investors understand how a fund is performing in three key areas: Environmental (E), Social (S), and Governance (G). These scores break down the overall sustainability risk of a portfolio into these specific categories.
Each score reflects how much environmental, social, and governance factors contribute to the overall risk of companies in the fund. The scores are averaged based on the size of each company in the portfolio. Lower scores mean lower risk.
To receive these scores, at least 67% of the fund’s assets must be rated for their ESG risk. This provides investors with a clearer view of a fund’s exposure to sustainability risks in different areas.
Asset Allocation Explained |
Equity – Often referred to as shares. Shares are units of ownership in a company which entitle the holder to certain rights for example to exercise voting rights or to participate in the company’s profits.
Fixed Income – Often referred to as fixed interest or bonds. When you invest in bonds, you are typically lending money to a company or a government in return for a defined series of interest payments and the promise that a defined value (called the ‘face’ or ‘par’ value) will be returned at a certain point in time
Property – Investments in property include residential, offices, warehouses and shopping centres.
Cash – Money held in cash or cash-like instruments, often to ensure there are sufficient liquid assets within a portfolio.
Other – Contains other investments such as commodities, preferred stock and derivatives.
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Many British people have, for decades, been somewhat obsessed with comparing their property with their pension, or pitting their buy-to-let place against their stock market returns. It makes for a rich vein of dinner-party conversation but is otherwise a difficult comparison to make.
The different types of assets – shares or bricks and mortar – have very different qualities and performance records, and the differences between the two approaches have become even starker in recent years.
Yes, owning your own home makes a lot of sense when compared to renting all your life and paying off someone else’s mortgage. But with house price inflation far surpassing wage growth and huge deposits required, home ownership is often out of reach for many people. This is why the age of an average first-time buyer is creeping upwards. It is now 33.8 in London and 32.1 outside the capital, while the average deposit size is now £61,000.
All that said, the criteria for purchasing a property to call home are very different to those for buying a property as an investment. Before you decide either way, we wanted to walk through some of the considerations.
Rather than your own needs, which might include transport links, proximity to work, friends or family, perhaps a bustling nightlife or having the countryside on your doorstep, for those renting out somewhere, the desirable qualities will be far less personal.
If renting to families, perhaps a common commuter belt or being near good schools and nice outside spaces might come into play, while renting to students will require a different set of ‘must have’ features.
For those thinking about investing to make money, it probably makes sense to start by looking at performance. Obviously rental properties will differ hugely depending on their location, value, amenities, and market demand. Therefore, we need to make some generalisations for the sake of this article.
If we look at returns over 10, 20 and 30 years, comparing the average UK property price with the FTSE All-Share Index*:
| Timeframe to November 2023 | Average Property Price Increase | UK All-Share Price Returns | UK All-Share Total Returns |
|---|---|---|---|
| 30 years | 427.43% | 160.45% | 631.03% |
| 20 years | 109.27% | 88.84% | 283.43% |
| 10 years | 60.11% | 14.24% | 63.84% |
As you can see from the above table, on basic price returns, property prices have surpassed the growth in the FTSE All-Share over three time periods, but with reinvested dividends – the fourth column – comparative growth numbers are generally far superior.
Also, remember that timing matters. You need to factor in what was going on during particular timeframes whenever comparing different assets.
While performance is often the starting point, it does not paint the whole picture. As we often say, past performance is not a reliable indicator of future results. The investment returns we just looked at didn’t factor in any costs of investing in either property or shares. You’ll need to consider trading, fund management or platform charges on any investments.
Meanwhile owning a property – whether as an investment or a home – requires a lot of outlay. Some of these costs will be one-off upfront fees, such as a deposit, stamp duty and other taxes, and legal fees. Other costs will be ongoing, such as mortgage payments, insurance premiums and maintenance.
One of the attractions of property is that it is a physical asset that you can see and feel, unlike shares which these days are just a line of text in your online account. However, that physical presence comes at a cost. You can’t change the location of a property, or sell just a part of it, or indeed sell all of it whenever you feel like it.
Shares and funds have different liquidity characteristics – that means some are more easily sold than others – but in general terms, it tends to only take a few days to get your money back, and you can sell just a part of your holding and retain some.
A commonly held view is that investing in property is less risky than investing in shares. This is hard to really quantify, as shares are traded daily with prices updated every second. This means they might look more volatile than properties, which are valued less frequently – only ever really if someone is buying or selling a property, or applying for a mortgage.
But risks apply in both cases. Share prices can rise and become overvalued and there is a risk that a company might collapse, meaning you get back less than you first invested. Property, on the other hand might see you having to put thousands of pounds into repairs and property prices can also fall, which might influence if or when someone can sell, or the amount of money to be made. In both cases the risks can be managed and reduced, but never removed entirely.
Overall, it is a personal preference what you choose to invest in. Whether buying a home, buying a rental property, or investing in the stock market, we’d urge you to consider all these factors carefully before opting for one route or the other.
*Sources: Property data sourced from: Land Registry / Data supplied by Morningstar. Figures based on the annualised rate of return of the FTSE All-Share index commencing 01/12/1993 (30 years), 01/12/2003 (20 years) and 01/12/2013 (10 years) respectively. Ending 30/11/2023. FTSE All-Share Price Returns are presented net of dividends reinvested. FTSE All-Share total returns are presented inclusive of dividends reinvested. The data used is before commissions, costs or other charges; which would reduce real world returns.
