BLOG: Five ways to future-proof your ISA portfolio
We are living in such fast-changing times that it can be difficult to keep up.
The incredible advances within technology, medicine and the environment are transforming everyone’s lives. For example, Apple only launched the first iPhone 15 years ago – but millions are now sold every year. Can you even imagine life without a smartphone?
Of course, these remarkable advances pose a dilemma for investors: How do they help ensure their chosen holdings can stand the test of time?
Here, we highlight five interesting funds that may help future-proof your ISA portfolio with theme and fund exposures that are expected to flourish in the coming years.
Guinness Global Innovators fund
As the name suggests, this fund is all about finding, and investing in, innovative and disruptive businesses which are changing the world in which we live. The managers have created an investment universe by identifying nine innovation themes from which they pick the highest quality, fastest growing and best value stocks.
These themes are advanced healthcare; artificial intelligence and big data; clean energy and sustainability; cloud computing; internet, media and entertainment; mobile technology and the internet of things; next generation consumer; payments and FinTech; robotics and automation.
VT Gravis Clean Energy Income fund
Renewable energy is an important theme and this fund’s aim is to capitalise from the move into this area, while generating an attractive income and modest capital growth. The fund, which aims to deliver a 4.5% dividend yield after charges, invests in various assets that are involved in the clean power generation sector.
This includes profitable companies that derive a significant proportion of revenue from increasing the efficiency of – and reducing the pollution from – traditional power generation.
The portfolio currently has 42% invested in wind, 31.3% in solar, and 7.7% in hydro.
The largest stock weighting of 7.4% is currently in Greencoat UK Wind, which invests in operating UK wind farms.
AXA Framlington Global Technology fund
This fund aims to provide long-term capital growth by investing in technology companies from around the world. A look at its holdings illustrates the point: Alphabet, Apple and Amazon are among the 10 biggest positions in the portfolio. The fund is managed by industry veteran Jeremy Gleeson. As well as being at the helm of this portfolio since 2007, he’s been involved in the technology sector for almost 25 years.
Looking ahead, the manager expects to see more robust spending on cybersecurity as companies face more threats to access their data and systems.
“Firewalls, email protection, cloud-based security and vulnerability management are all important aspects of a holistic approach to cybersecurity and we have several investments across these areas,” he said.
Schroder Digital Infrastructure fund
No-one can argue that we’re undergoing a digital transformation and the demand for data has increased exponentially in recent years. Despite this, our digital infrastructure is way behind where it needs to be: half the global population still don’t even have access to the internet.
That’s where this fund comes into play. Its philosophy is simple: technological advances are driving massive demand for data and therefore digital infrastructure. Digital transformation is impacting every industry and access to the internet is now ‘mission critical’ for society – our whole economy is dependent on it. Therefore, digital infrastructure is critical for future economic growth.
Polar Capital Global Healthcare Trust
There have been some incredible advances in healthcare over recent years and this fund looks for the best growth opportunities within these industries. The holdings will generally hail from four sub-sectors: pharmaceuticals, biotechnology, medical technology, and healthcare services.
The managers can buy into everything from innovative small-cap biotechnology stocks to global pharmaceutical giants. The main criteria is having powerful growth stories that are shaping the world, but large-cap, high quality healthcare holdings will dominate. This is illustrated by examining the top 10 positions. This list includes Johnson & Johnson, AstraZeneca, Bristol Myers Squibb and Sanofi.
Juliet Schooling Latter is research director at FundCalibre