Right, we’ve reached that time of year again. No matter what madness is being unleashed in the wider world, the new tax year has come around, unperturbed, once again.
So, where should you invest this year’s individual savings account allocation? There is certainly no shortage of funds, so which ones are worth considering?
We asked six financial experts to suggest portfolios that could be suitable for lower, medium and higher risk investors.
Lower risk investors
Vanguard FTSE UK All Share Index
Investing in stock markets is risky and you’ll need to nurse losses at times, according to Justin Modray, founder of Candid financial advice. “A low cost FTSE All Share tracker is a good starting point. In the current high inflation climate, it feels a sensible alternative to the corporate bond funds usually favoured by cautious investors.”
Troy Trojan Ethical
Ben Yearsley, Shore Financial Planning’s investment director, agrees you have to take some risk for a better return than cash. “The ethos of the fund is to protect investors’ capital and grow at least with inflation over the medium to long term,” he said. “It invests in quality global companies, inflation linked government bonds and gold.”
LF Ruffer Diversified Return
This is an absolute return vehicle with the protection of investor capital at its heart, pointed out Darius McDermott, managing director of FundCalibre.
“The fund aims not to lose money on any 12-month rolling basis, with a strong emphasis on providing genuine protection in times of market stress.”
Troy Trojan
Kate Marshall, lead investment analyst at Hargreaves Lansdown, believes total return funds could be useful in volatile times as they embrace a mix of investments. “This fund could form the foundation of a broad investment portfolio and has the potential to bring some stability to a more adventurous portfolio.”
Personal Assets Trust PLC
Jason Hollands, managing director at Bestinvest, likes the fact that it focuses on delivering real returns that beat inflation, as well as capital preservation. “It won’t shoot the lights out when stock markets are soaring, but it is a steady-eddy that will prove defensive in turbulent times,” he said. “It does this by taking a multi-asset approach.”
Medium risk investors
FTF Franklin UK Equity Income
Modray likes the fund’s combination of a very capable management team and fair annual charges. “The managers favour large cash-generative companies that look decent value, an approach that has worked well long term.”
First Sentier Responsible Listed Infrastructure
The idea is investing in key infrastructure assets we need, such as mobile phone towers, according to Yearsley. “It offers good inflation protection and pays a decent dividend,” he said. “It doesn’t invest in things like oil pipelines, hence the responsible name tag, and is a core, long term defensive holding.”
Liontrust Sustainable Future Managed
This fund has a sustainable process and invests in a combination of global equities, bonds and cash, pointed out McDermott. “The managers use a thematic approach to identify the key structural growth trends that will shape the global economy of the future.”
Legal & General Future World ESG Developed Index
Responsible investment funds give you the chance to make money in line with your principles, pointed out Marshall. “This fund invests in broad developed stock markets while being mindful of environmental, social and governance (ESG) issues.”
TB Evenlode Global Income
Hollands likes the global approach. “The fund invests in a concentrated portfolio of high-quality companies that the managers have targeted because they provide a high return on capital and generate strong free cashflow.”
Higher risk investors
MI Chelverton UK Equity Income Fund
Modray believes this fund, which focuses on smaller UK companies, offers good income and growth prospects. “Shorter-term volatility can be high, but the fund is well-diversified and the management team has a good long-term track record.”
Schroder Global Energy Transition
Yearsley believes this is ideal for those focused on the decarbonisation story. “It will be volatile but can potentially invest in every facet of the clean energy revolution,” he said. “It’s not an area for the faint-hearted but the long term structural trend is clear.”
BMO Responsible Global Equity fund
It invests in quality growth companies from across the world, with a focus on sustainability, according to McDermott. “The managers don’t only invest in companies that are sustainable today but engage with others that are just starting their journey to help develop better practices.”
ASI Asia Pacific Equity
The Asia Pacific region has potential, according to Marshall. “While Asia is home to developed markets such as Hong Kong and Singapore, others, including China and India, are still emerging so a long investment horizon is essential to help ride out the ups and downs.”
Aubrey Global Emerging Market Opportunities
One of the biggest long-term opportunities is the growth of the emerging market consumer, according to Hollands. “The fund focuses heavily on the theme of growing consumption,” he said. “It has a whopping 44 per cent of the portfolio invested in India and 36 per cent in Chinese companies.”
An alternative option
Scott Gallacher, director at Rowley Turton, favours the L&G Multi-Index fund range as they are “low-cost, multi-index funds” covering lower to higher risk investments.
“No matter where you are on the risk spectrum, there should be a fund suitable for you,” he said. “We use these funds as part of many of our clients’ portfolios.”
