A testosterone-fuelled White House is busy upending the geopolitical norms that have governed international relations. If this has made you hanker to have your money managed by a level-headed lady, here are some of our suggestions…
If it’s capital growth you’re after, Rosemary Banyard, manager of the VT Downing Unique Opportunities fund, has a strong pedigree. Ex-Schroders, she has been a UK small and mid-cap company analyst and investor for 40 years. Today, she is at boutique group Downing, which gives her plenty of flexibility.
The fund has 33 holdings and recent performance has been powered by groups such as defence stock Chemring, Irn Bru maker AJ Barr, and technology company Alpha Financial Software. Among the fund’s top holdings today are specialist technical products group Diploma, Warhammer maker Games Workshop, and IT infrastructure group Softcat. Unusually for a UK fund, its largest weighting is in technology companies.
But at its heart, it’s looking for sensible, well-run companies. Rosemary likes companies with strong finances and high profit margins – 26 of the holdings in the portfolio have no net debt. She says: “It gives them optionality when markets are volatile. They can buy back shares, pay special dividends, make acquisitions, or other investments. I feel reasonably comfortable that these companies will come out the other end (of any volatility) stronger, because some of the competition will have disappeared.”
If investors would like a little income with their capital growth, the Schroder Income Growth Trust, managed by Sue Noffke, may be an option. It currently has a yield of 4.88%, but also aims to grow that dividend over time, and generate capital growth on top. Like Rosemary, Sue is an industry veteran (30 years in the business and counting), and also serves as Schroders’ head of UK equities.
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She believes that the UK could be a good place to be hunting for opportunities in an uncertain time, adding: “From a world perspective, there is a lot of policy uncertainty and it does seem to be America First.
From a UK investor standpoint, the UK stock market is very international – three-quarters of its revenues come from overseas, and yet we trade on a valuation that is at a multi-year low in absolute and relative terms. There is an opportunity for investors to stick with UK equities and get exposure to international revenues and profits, but on a cheap valuation.”
Safety-first approach
For a more safety-first approach, investors could look to the Jupiter Monthly Income Bond fund, managed by Hilary Blandy. This is a bond fund, but invests exclusively in shorter-dated bonds. This means that the fund has less exposure to the vagaries of interest rates and more exposure to the fortunes of individual companies.
Hilary has an excellent track record in picking those bonds. She managed Jupiter’s credit research team from 2016 to 2019 and can call on the 11 credit analysts on the Jupiter team to help with her decision making. This impeccable credit research has also given the fund greater consistency than many of its peers in the strategic bond sector.
It currently has a yield of 6.69%, which puts it well ahead of cash deposits. It did lose a little in the bond market sell off in 2022, but less than its peers and, importantly, made it up again the next year. Overall, it is up 24.2% over five years, compared with an average of 7.9% against its peers and could be a compelling, lower-risk option for a more difficult environment.
Investors will need a little bit of international exposure as well. The abrdn smaller companies team boasts a raft of good female fund managers. Abby Glennie, who runs the group’s UK Mid-Cap Equity fund, for example, and Amanda Yeaman, who runs the group’s UK small-cap fund. However, for some global exposure, investors could turn to Kirsty Desson, who manages the group’s Global Smaller Companies fund.
It’s been a tough time for global smaller companies, which have been neglected by investors as all attention has focused on the mega-cap technology companies. However, in the normal run of things, small-caps tend to outperform large-caps because they have higher growth potential. Smaller companies also tend to be less liquid, which allows for anomalies in their share prices that allow active managers to add value.
All the Aberdeen smaller companies funds employ the group’s screening tool ‘Matrix’, which former head of the group Harry Nimmo helped create. This looks at factors such as quality, growth and momentum to identify smaller companies from all around the globe – including emerging markets – that they believe to have the best growth prospects. Kirsty’s fund portfolio has 50-60 names, including sportswear group ASICs, home appliance group SharkNinja (famous for its air fryers) and defence technology group Axon.
Kirsty says the fund is currently exposed to a range of structural growth themes: “This includes ‘resilient consumption’. We’ve identified a number of niche, consumer-focused companies with excellent management teams. We also have a number of companies driving digital evolution that are breaking the mold in the industries in which they compete.”
She believes it will be a better period for global small-caps because of the current interest rate environment and valuation levels: “We may not know the exact timing of rate cuts, but the direction has become clearer. Data shows that historically small-caps outperform in a rate-cutting environment. Equally, on valuations, the asset class currently trades at a discount to its own history and to large-caps.”
These capable and experienced ladies will give you a good, balanced range of investments. When you’re building your ISA portfolio this year, it’s worth asking yourself whether the best man for the job might just be a woman.
Juliet Schooling Latter is research director at FundCalibre and Chelsea Financial Services
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. Juliet’s views are her own and do not constitute financial advice.
