You are here: Home - Investing - Experienced Investor - News -

Five funds to watch in 2019

Written by: Thomas Rosser
The Share Centre’s junior analyst Thomas Rosser highlights five funds to keep an eye on next year.

Schroder Income

This is a largely UK-focused fund with investments in non-cyclical consumer services companies, which means it could perform well if markets decline further. Schroder Income also has the benefit of holding a number of large-cap UK firms with global operations, which stand to benefit if sterling weakens.

Dividend growth-focused funds tend to exhibit lower volatility than growth-orientated funds, so this fund could potentially be better insulated from a sharp market downturn.

In recent years there has been a considerable dividend yield premium over government bond yields when viewed in a historical contextThis allows the reinvesting of dividends to make a favourable difference over time due to the power of compounding.

Merian Gold and Silver

This fund provides exposure to both gold and silver bullion, as well as gold and silver listed securities. This strategy typically performs well when precious metals appreciate or during a bull cycle. Silver typically outperforms gold when both are rallying, providing a further boost to returns compared to gold-only funds.

Gold has also maintained its purchasing power over the long-term despite short-term volatility. One reason that gold should have a place in a diversified portfolio is that it tends to respond positively to events that cause the value of fixed income and equities to fall.

It should provide a supportive backstop if market sentiment wanes further from here.

Royal London Sterling Extra Yield Bond

This is a highly diversified portfolio which focuses on bonds that are supported by stable income streams. This fund should be somewhat protected during times of market turbulence. In recent months uncertainty surrounding economic growth and low interest rates have highlighted the attractions of income-generating assets.

The manager of this fund has over 35 years’ experience, and is well seasoned to deal with market fluctuations and interest rate risk.

First State – Global Listed Infrastructure

Infrastructure typically has stable, defensive and inflation-protected cash flows and capital growth opportunities. Exposure to infrastructure could prove important as we move into a more challenging economic outlook.

This fund performs best in relative terms when markets are falling because of the economic insensitivity of the underlying holdings and the attractive yields on offer. Regulated returns in this sector generally benefit from falls in bond yields.

If there is economic uncertainty we could see a ‘flight to quality’, as investors buy high quality bonds. This could push bond prices up and yields down, which would benefit the fund.

This fund offers a specialist area of the global equity market that is largely under researched and can be used as a low risk diversifier within an equity portfolio.

Baillie Gifford Positive Change

An increasing number of investors think about sustainability and ESG (environmental, social and governance) issues when it comes to their investments, especially as more millennials begin to invest.

This relatively new fund from Baillie Gifford invests in companies whose products or behaviour makes a positive impact in one of four areas: social inclusion and education, environment and resource needs, healthcare, and quality of life.

It is thought that companies that deal with large social and environmental issues also have significant growth potential. Consequently, this could provide potential for sustainable returns to investors over the long term.

This fund arguably offers a vastly different proposition by implementing positive screening processes rather than the negative screening that many traditional sustainability funds use.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Five common impact investing myths debunked

Louisiana Salge, an impact specialist at wealth manager EQ Investors, dispels some of the common myths associated with impact investing.