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Around the world in five ISAs

Written by: Darius McDermott, managing director of Chelsea Financial Services and FundCalibre
Brexit, trade wars and crises in a series of emerging markets were the headline acts of what was a tumultuous 2018 for investors.  Each part of the globe still faces its own challenges, but also has its own opportunities.

Below we look at five funds from different parts of the world which could help you take advantage of opportunities in each region.

Brexit battered UK

Artemis Income  

This fund has been a stalwart in the UK equity income sector for almost 20 years and is headed by the trio of Adrian Frost, Nick Shenton and Andy Marsh. It typically holds 50-70 stocks and has a bias towards larger companies – which currently account for 78%* of the portfolio. The fund mainly invests in companies listed in the UK, but it does have the ability to invest in companies overseas when the opportunities arise. The managers will also look specifically for firms with a competitive advantage and where barriers to entry are high.

Talk of recession brings opportunities in Europe

Threadneedle European Select

Markets in Europe are sniffing recession as geopolitical concerns remain rife, but recession often gives rise to bargain prices for companies. This is a high conviction fund where managers David Dudding and Mark Nichols largely ignore economic factors and prefer to spend their time researching individual companies. They tend to avoid industries with high regulatory uncertainty, such as banks and telecoms and have a preference for larger companies that have pricing power.

US continues to defy late cycle fears

Lazard US Equity Concentrated

The US economy was boosted last year by a big tax cut and an increase in government spending. However, it does have some challenges courtesy of an irascible President and an ongoing trade war with China. As the name suggests, this is an extremely concentrated fund typically holding no more than 20 to 25 companies, ranging in size from the fairly small all the way through to the very large. The team spends a lot of time on-the-ground in America and know every company in the portfolio inside out. Popular names such as Coca Cola and Alphabet, the parent company of Google, are among its largest holdings*.

Abenmonics bolsters Japan but risks remainRowe Price Japanese equity

After decades of stagnant growth and false dawns, life was finally breathed back into the economy thanks to Abenomics in 2012, however external risks and trade friction still impact investor sentiment. Tokyo-based Archibald (Archie) Ciganer has run this fund since December 2013, after joining T. Rowe Price as an analyst in 2007 and covering many of the industries in which the fund invests. This fund holds around sixty to one hundred Japanese companies, with a notable bias to smaller firms. Archie targets businesses with competitive advantages in areas such as brands or technology – as he thinks they are often undervalued by the market.

Asia to be the world’s growth (and possibly income) engine

Guinness Asian Equity Income fund

Asia is expected to be the world’s growth engine of the future, making it almost impossible to ignore as an investment for the medium to long-term, However, it also offers an income opportunity to investors, as the dividend-paying culture grows. The Guinness Asian Equity Income fund invests in 36 equally-weighted stocks across the region, including Australia. Fund managers Edmund Harriss and Mark Hammonds have built a portfolio based on companies which can sustainably grow their dividends and the fund currently has an historic yield of 4.1%*.

*Source: Fund fact sheets, 28 February 2019

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Darius’s views are his own and do not constitute financial advice.




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