Balanced vs Bold: Which fund is right for you?

A guide to help you choose between Zopa’s investment funds 

Choosing a ready-made investment fund is a quick, easy and affordable way to start investing. It takes a lot less time and experience than making your own investment portfolio from scratch, and it’s cheaper than having someone personally manage one for you.   

At Zopa, we offer two ready-made funds: Balanced and Bold. All you need to do is pick the one that suits you and the risk level you’re looking for. Here’s more information to help you choose.   

Our two funds have a lot in common 

We’ve thought about what our customers might want from a fund, and made sure both of ours share some important features: 

• They’re managed by Invesco, a company with decades of experience. Read more about Invesco.  

• They invest in a mix of bonds and shares. The proportions are different in each fund, which we’ll explain below. 

• They’re diversified. That means they invest across a range of companies, industries and countries. 

• They have exactly the same competitive and transparent fees of 0.54% per year. So you can rest assured knowing there are no hidden costs. 0.40% of this fee goes to Zopa and 0.14% goes to Invesco. To help you get started, we’ll waive our share of the fees for your first 3 months. 

• They’re both recommended for people planning to invest for at least 5 years. 

• They’re designed with environmental, social and governance (ESG) criteria in mind. They avoid investing in industries like tobacco and weapons and look for businesses with strong or improving ESG practices. 

The key difference is the investment mix 

Each fund contains a different mix of bonds and shares. Let’s explain those terms, if they're new to you: 

• Bonds are like loans. You lend money to a government or company, and they pay you interest in return. Bonds are usually fairly stable and predictable. 

• Shares are small parts of a company. The value of your shares depends on how well the company is doing. Shares typically have more ups and downs than bonds, but offer higher growth potential. 

Our Balanced fund is made up of 52% bonds and 48% shares. Our Bold fund is made up of 14% bonds and 86% shares. 

Bonds and shares have different risks involved 

Bonds  

As bonds are loans, there’s a risk that the issuer (the company or government) might not be able to pay the interest when it’s due. Invesco’s fund managers will choose the bonds that they think are an appropriate level of risk for our funds, to minimise the risk of this happening.  

Bonds can also rise and fall in value due to changes in interest rates, inflation and the economy. Experts will forecast these rises and falls, but the returns can be slightly better or worse than expected. 

Shares  

With shares, there’s a risk that the companies you invest in could perform badly , causing the share value to fall. That’s why it’s important to invest in lots of different companies across as range of industries and countries. Both our funds are diversified – meaning they invest in hundreds of companies – helping to manage this risk. 

There can also be times when the whole stock market declines, rather than grows. This usually only happens for short periods (days, weeks or months). Over longer periods (5 years or more), the stock market tends to grow overall.  

Shares are more volatile than bonds 

Volatility is a word we use a lot in investing: it describes how often, and by how much, an investment changes in value. 

Share prices can be quite volatile. They change from day to day (or even more frequently) – usually by a little and occasionally by a lot. Bond prices don’t usually change as much or as often, so they’re less volatile.  

Volatility isn’t good or bad, but some investors are more comfortable with it than others. Some don’t like to see their investments fall in value, even though they’re likely to go back up again. Others don’t mind the ups and downs, as they care more about the overall growth. Which of these categories you fall into will be a major factor in which fund is better for you.  

More volatility means more growth potential 

You’ll remember that the Balanced fund is made up of a much higher percentage of bonds than the Bold fund. That means the Balanced fund is lower risk and less volatile (but not completely risk-free).  

Over the last few years, the Balanced fund has grown at an average rate of 4.81% a year.  There have been some small ups and downs along the way, and there could be in the future, too.  

The Bold fund contains a higher percentage of shares than the Balanced fund, which means the overall risk is higher and it’s more volatile.  

Over the last few years, the Bold fund has grown an average of 9.04% a year.  The ups and downs along the way have been bigger, and they’ll likely continue to be in the future. 

You can opt for smoother returns or potentially higher returns 

To summarise, our Balanced fund is a better fit for people who are aiming for slightly higher returns than a typical savings account, but who would prefer to avoid big ups and downs.  

Our Bold fund is a better fit for people who are aiming for significantly higher returns than a typical savings account, and who don’t mind bigger ups and downs along the way.    

Here’s a side-by-side comparison:  

*Average annual return  tells you how much this fund has grown each year, on average, between 14 January 2021 and 30 September 2025. While this is a useful guide, it  can't be used to predict future returns. 

If you’re not sure which way to go, here are a few options: 

• You could start with the lower risk option (the Balanced fund) and build your confidence over time.  

• You could learn more about investing and risk before making your decision. Check out our beginners guide, How to Start Investing.

• Read about each fund in more detail: Balanced Fund information and Bold Fund information. 

Ultimately, there’s no right or wrong choice – only the one you feel most comfortable with.