Telegraph 25: how our fund picks have fared
A lot has happened since we first tipped our 25 favourite funds in January 2016. James Connington reports
periods in the past before proving doubters wrong. However, we will watch closely in case problems persist.
Return since Jan 30 2016: 46pc Sector average return: 43pc For UK-based investors, the pound’s fall has significantly boosted the returns from international investments. This, combined with surprising global market rallies, has meant huge returns from L&G’s FTSE World tracker fund.
Return since Jan 30 2016: 71pc Sector/index return: 49pc/45pc It has been a big year for James Anderson’s investment trust, which has now entered the FTSE 100. Its large holdings in top growth stocks such as Amazon, Tesla, Alibaba and Google, plus the boost from the pound, have led to astonishing performance.
Return since Jan 30 2016: 49pc Sector/index return: 43pc/45pc There have been concerns that the benefited from the US market rally following Donald Trump’s election and the effects of the weak pound.
This exchange-traded fund still provides one of the cheapest ways to buy into the US market, where our preference remains in favour of “passive” investing.
Return since Jan 30 2016: 45pc Sector/index return: 43pc/41pc The pound’s weakness against the yen accounts for half of the fund’s return. In local currency terms, it has gained 20pc, compared with 15pc for the index. The managers are clear that their fund is fully exposed to currency movements. Their “value” approach to investing in Japan could benefit from global interest rates rises. Return since Jan 30 2016: 26pc Sector average return: 26pc Our recommendation applies to the range of five “LifeStrategy funds”, depending on which suits best. For performance purposes we have looked at the most popular option, 60pc shares/40pc bonds. It has matched the return of the average “mixed investment, 40pc to 85pc shares” fund over the period. Vanguard cut the fee on the range from 0.24pc to 0.22pc in January.
Return since Jan 30 2016: 9pc Sector average return: 19pc There are multiple funds in Schroder’s MM Diversity range, but we have focused on the main MM Diversity portfolio. It sits in the “mixed 20pc to 60pc shares” sector, which it has lagged. However, the fund is around 30pc invested in shares and has 25pc in cash, so would not be expected to beat funds with 50pc or 60pc in shares. Its aim is to stay ahead of inflation, and
Return since Jan 30 2016: 57pc Index return: 47pc India has been volatile but profitable for investors over the past two years, and there is a clear advantage to investing via a top stock picker. This fund’s manager, Avinash Vazirani, has nearly tripled the index’s return since 2008, when he began running the fund. Sterling weakness has had a significant impact. In Indian rupees, the fund has returned 35pc, compared with 28pc for the index since we picked it. Return since Jan 30 2016: 32pc Sector/index return: 39pc/31pc This sector has also offered a bumpy but profitable ride in recent years. While over 10 or 15 years the trust has beaten the Nasdaq Biotechnology index, in recent years it has followed it very closely. This index can be tracked for a significantly lower 0.47pc annual charge via the iShares Nasdaq Biotechnology ETF. As a result, we may recommend a switch when we next come to overhaul our choices. Return since Jan 30 2016: 41pc Sector return: 37pc This “smart tracker” fund tracks companies from a global index that have grown dividends for at least 10 years and can support future payments. It has beaten the average global equity income fund, for a charge of just 0.45pc a year.
‘Sterling weakness has boosted returns from internationally focused funds’
Amazon is one of the biggest holdings of the Scottish Mortgage trust. Inset, Jeremy Lang runs Ardevora’s UK Income fund