WE ASKED A PANEL OF INDEPENDENT FINANCIAL ADVISERS FOR THEIR TOP THREE SUGGESTIONS FOR LONGTERM INVESTMENTS THAT WILL HELP TO GUARD AGAINST STOCK MARKET VOLATILITY, AND THE REASONS BEHIND THEIR CHOICES.
Ben Yearsley, Hargreaves Lansdown
CF Miton Strategic Portfolio: This fund tends to have its best hour when all others around it are falling. The fund manager, Martin Grey, takes large cash positions at certain times, and 50pc is currently invested in cash and fixed interest.
Invesco Perpetual High Income: Neil Woodford has been managing money for a long time and has been through many different market environments. If there is one man to get you through a crisis it is Mr Woodford.
CF Midas Balanced Growth: The philosophy of this fund is to provide long-term capital growth with reduced volatility through a combination of assets.
Justin Modray, Bestinvest Brokers
CF Midas Balanced Income: This fund aims to reduce risk by investing across global stock markets, corporate bonds, property, hedge funds and protected funds. The result to date has been low volatility.
Merrill Lynch UK Absolute Alpha: This fund can actually benefit from stock market falls as the manager, Mark Lyttleton, is allowed to “short” stocks. This means he can use special financial instruments called derivatives to generate profits when the price of a share falls.
Morgan Stanley FTSE Protected Growth 18: This guaranteed equity bond offers investors 160pc of FTSE 100 growth over six years with full capital protection. If the index has risen by 30pc or more after three years the plan closes early and investors receive their initial investment plus 30pc. On the downside they do not benefit from dividends, but this type of plan is well-suited to nervous investors.
Justine Fearns, AWD Chase de Vere
CF Midas Balanced Growth: There has been a growing interest in multi-asset funds but Midas Balanced Growth is one of the better known and better performing funds.
Invesco Perpetual Income Fund: Neil Woodford sometimes takes a contrarian view and invests in unloved areas of the market, which can lead to shortterm underperformance, but in the longer term it helps the fund.
Barclays Five Year Guaranteed FTSE Account S6: This product provides 100pc capital protection, as long as it is held for the full five-year term. In return for their five year commitment, investors participate in 120pc of any return on the FTSE 100, although this does not include any of the dividends. It has a minimum investment of £3,000 and is open until August 31.
Darius McDermott, Chelsea Financial Services
Schroder Income Maximiser: This fund is designed to give an income of about 7pc and should outperform in negative markets.
Merrill Lynch UK Absolute Alpha: This fund has the ability to make money on shares that go down as well as those that go up. This gives it a good chance of making money in negative markets.
Multi Asset funds, such as HSBC Open Fund Global or Newton Phoenix: These funds invest in a number of different asset classes, which do not all go up and down at the same time, and hence try to give smooth returns.
Philippa Gee, Torquil Clark
T Bailey Cautious Managed: This is a multi-asset fund investing in cash, equities, bonds and property. This particular offering is a multi-manager fund, so you get the added bonus of exposure to a variety of underlying funds, operated from a specialist investment house.
F&C Multi Managed Distribution: Another multimanager fund, but one where the allocations are fairly fixed so that you have 30pc in equities, 20pc in property and 50pc in bonds and cash. This allows the team to concentrate on choosing the right funds for each category.
New Star Tri-Star: This offering invests in equities, bonds and property, tapping into the well-known New Star fund managers such as Stephen Whittaker, James Gledhill and Roger Dossett. It is not a multimanager offering, so you keep all the money in-house and while you lose out in diversification, you can gain with lower charges.