ISA tips: five funds for last-minute investors
However, with people looking for different outcomes from their investments – and thousands of funds to choose from – picking the right investment solution can be difficult.
To help you reach your goals we’ve picked five fund options, each demonstrating a different characteristic for investors.
One for income investing – The City of London Investment Trust
The challenge of achieving a steady income in a prolonged low interest rate environment cannot be understated. Therefore, a trust which has increased its dividend for over 50 years could be a welcome solution for investors.
That is exactly what the City of London Investment Trust has done. The trust launched in 1891 and is one of the oldest in the UK. Managed by Janus Henderson’s Job Curtis since 1991, it has a bias towards larger UK companies. It currently has a yield of 4.57%.
One for growth investing – Jupiter Merlin Growth
The Jupiter Merlin range is arguably the most well-known fund of funds offering in the UK. The team, which is headed by John Chatfeild-Roberts, manages an eight-strong fund range offering differing mixes of equities, bonds and some property based on attitudes to risk.
This is one of the higher-octane funds in the range, targeting both growth and income. The managers have complete control of asset allocation and focus on the macroeconomic environment before choosing the appropriate underlying funds in which to invest. The fund has been a top quartile performer in the Investment Association Flexible Investment Sector over one, three and five years.
One for value investing – Fidelity Global Special Situations
Fidelity Global Special Situations manager Jeremy Podger focuses more on three types of ‘investments’ rather than companies specifically. He looks to combine corporate change – typically related to mergers and acquisitions or companies undergoing a restructure – with exceptional value opportunities, and also businesses which have a strong competitive position and dominate their respective niche.
The fund typically is well-diversified with over 100 holdings. More than half (55.4%) of the fund is currently invested in the US.
One for flexible investing – Baillie Gifford Strategic Bond
Investing in bonds is no easy task, so using a strategic bond fund is one way for investors to swerve the challenges of asset allocation by allowing the managers of their respective funds to do almost anything as and when they see fit.
The Baillie Gifford Strategic Bond, managed by Torcail Stewart and Leslie Dunn, is one of the leaders in a rapidly growing sector. This fund invests in a concentrated portfolio of 40-60 holdings and, unlike most of its peers, aims to add value almost exclusively through the managers’ stock-picking prowess.
For the more cautious investor – BMO MM Navigator Distribution
Experienced fund of funds duo Rob Burdett and Gary Potter, along with their team of six, look for reliable income and growth of investor capital.
Meeting managers is central to their process, and they have developed a unique skill in finding specialist funds from boutique managers with a focus on sustainable high yield.
Largest underlying fund holdings include the Schroder Income Maximiser (6.1%), Majedie UK Income (5.3%) and J O Hambro Capital Management UK Equity Income fund (5.2%).
Darius McDermott is managing director of FundCalibre