You are here: Home - Investing -

Three funds to back to beat inflation

Written by:
Investors are struggling to find ways to beat inflation, with savings accounts paying virtually nothing. But there are a number of funds out there which can deliver.
Three funds to back to beat inflation

Hargreaves Lansdown has outlined three asset classes still able to offer above-inflation returns, and three funds best placed to access them.

Adrian Lowcock, senior investment manager, said flexible corporate bond funds, alongside income funds with either a UK or global remit, are some of the most effective ways to combat inflation.

Below, he highlights three funds across the asset classes which Hargreaves expects to beat inflation over the long term.

UK Corporate Bond – Jupiter Strategic Bond

“Despite talks of the great rotation strategic bond funds were the best-selling sector in April. They offer investors access to the whole market and allow the managers the greatest flexibility to identify opportunities and maximise both income and growth,” he said.

Lowcock said manager Ariel Bezalel is currently holding a large portion of the fund in high-yielding corporate bonds, taking some additional risk, but offsetting this with more stable holdings in areas such as the food industry.

The strategy has worked over the long term, with the Jupiter fund – which has an historic yield of 5.4% – far outpacing inflation.

It has made 27% over three years to 26 April according to Morningstar, also beating the IMA Strategic Bond Sector average of 23.3%.

UK Equity Income – JO Hambro UK Equity Income

Always a popular play in the UK, the domestic equity income sector has  become even more sought after recently as investors focus more on defensive companies with high dividends which make up a large proportion of most UK equity income funds.

Clive Beagles and James Lowen’s JO Hambro UK Equity Income fund currently has a yield of 4.2%, well above inflation, and is one of the stand-out performers over the long term.

The fund is up 41.3% over three years to 26 April, versus the IMA UK Equity Income sector average of 32.6%.

Global Equity Income – Newton Global Higher Income

Another popular fund with a long track record, James Harries’ £3.5bn portfolio has been buying up a lot of stocks in the US, UK and Europe recently, taking advantage of the rally.

The Newton fund yields 3.98% and is up 38.8% over three years to 26 April, the third best performing fund in the sector.

Harries is currently finding opportunities among up-and-coming businesses in higher risk emerging markets, alongside the more traditional global income names.



Tag Box

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.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week