Model portfolios: The leaders, laggards and switches

Helping do-it-yourself investors through uncertain times is one of the reasons our sister magazine Money Observer put together its 12 Model Portfolios in January 2012, especially for those no longer able or willing to shell out for professional advice, after fee-based advice was introduced in January 2013.

Here we outline the best and worst-performing holdings in the 12 growth and income-oriented Model Portfolios, with BlackRock World Mining continuing to be the lagging growth holding.

The trust has now been removed from one of our portfolios and we also reveal which other holdings have been dropped following the latest review and which have replaced them.

Interactive Investor clients can purchase these and our other portfolios as single investments at a reduced price. They also receive targeted email alerts detailing any changes to a Model Portfolio they have an interest in.

Click here to find out how all our portfolios have fared over the four years since their inception.

You can also check out how each individual portfolio has fared in our income review and growth review.

Leading income holding during 2015

PFS Chelverton UK Equity Income

PFS Chelverton UK Equity Income was brought into two of the income portfolios (Kilo and Lima) at the beginning of 2015. It has done well thanks to its bias towards mid-cap companies which were the UK market's strongest performers by size last year.

Leading growth holding during 2015

CF Miton UK Value Opportunities

Another 2015 addition, CF Miton UK Value Opportunities was added to two of the growth portfolios at the beginning of the year. Its managers have a strong reputation for finding undervalued companies and invest on the basis of conviction.

Lagging income holding during 2015

Temple Bar

One of the original holdings in four of the income portfolios, Temple Bar investment trust continued to deliver increased dividends in 2015 but its capital performance remained disappointing. We are now switching out of this holding.

Lagging growth holding during 2015

BlackRock World Mining

Added to two of the higher risk growth portfolios at the beginning of 2014 in the expectation that commodities were due for a recovery, the fortunes of mining companies have continued to go from bad to worse. We have now removed BlackRock World Mining investment trust from one of the portfolios.

Leading income holding during fourth-quarter

Scottish Mortgage

Although more focused on growth than income, Scottish Mortgage trust has clocked up more than 30 years of dividend increases as well as achieving strong capital growth by focusing on companies with "disruptive technologies".

Leading growth holding during fourth-quarter

Fundsmith Equity

Terry Smith, manager of Fundsmith Equity, which appears in three of our growth portfolios, has a simple investment philosophy. He aims to buy shares in large global companies with strong brands and balance sheets, tries not to over-pay and holds them for the long term.

Lagging income holding during fourth-quarter

Schroder Income Maximiser

Although Schroder Income Maximiser has continued to deliver a high income yield, thanks to its use of options, the capital performance of its share portfolio suffered last year from its exposure to the energy sector.

Lagging growth holding during fourth-quarter

BlackRock World Mining

Sentiment towards commodities deteriorated further along with concerns about China in 2015. However, for patient investors, we believe this holding will still pay off handsomely over the longer term.

Switches we are making in this review

Income portfolios

Out: Temple Bar (Golf, Hotel, Kilo and Lima portfolios)

It is with some regret that we have decided to remove this trust. While it has met our growing income requirements, its capital performance has been consistently disappointing as manager Alastair Mundy's contrarian approach has failed to deliver.

In: City of London (Golf and Hotel)

City of London has been increasing its income payments for nigh on 50 years. It invests mainly in well-known blue-chip, UK-listed companies and its performance is steady. It is a worthy addition to these medium-risk income portfolios.

In: Lowland (Kilo and Lima)

Lowland is another trust with a good record of increasing income payments. It invests in medium and small as well as larger companies. Fluctuations in its share price discount/premium to net asset value can sometimes make it a rather volatile holding, hence its addition to the higher-risk income portfolios.

Out: Fidelity Strategic Bond (Hotel and India)

With income yields compressed and the likelihood of interest rate rises ahead, life has not been easy for bond fund managers recently, so we have decided to switch from Fidelity Strategic Bond to a broader-based fund.

In: Premier Multi Asset Monthly Income (Hotel and India)

We believe Premier Multi Asset Monthly Income's highly diversified approach, investing across a broad range of asset classes and different investments, provides more scope for future growth of income and capital for a medium-risk investor.

Growth portfolios

Out: Newton Real Return (Alpha and Delta)

After only just managing to hold its ground over the past year and its disappointing performance since the portfolios' inception, we feel Newton Real Return is no longer meeting our expectations.

In: Kames Ethical Cautious Managed (Alpha and Delta)

Kames Ethical Cautious Managed invests in a combination of equities and bonds which meet the company's ethical criteria. This has not held it back from producing consistently good performance in the past and should suit the aims of a short-term growth investor.

Out: JPMorgan Global Emerging Markets Income (Echo and Foxtrot)

Exposure to China and Brazil in particular has held back JPMorgan Global Emerging Markets Income's performance recently. Unfortunately we do not see a meaningful recovery in the emerging markets taking place in the short-term future.

In: Old Mutual Global Equity (Echo and Foxtrot)

A two-time winner in our annual fund awards, Old Mutual Global Equity is highly diversified and adopts a pragmatic and multi-themed approach, taking into account market conditions, in order to back winning stocks.

Out: BlackRock World Mining (Echo)

Hit by some failed investments in 2014, the performance of this trust continued to suffer badly in 2015 from falling commodity prices. With Echo's medium term timescale in mind we have decided to switch.

In: Ardevora Global Equity (Echo)

Using a 150/50 long/short approach, which enables it to profit from falling as well as rising share prices, and with a clear investment style, we expect Ardevora Global Equity to make good progress.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.