Five funds to fill up your new £20k Isa
WITH a new tax year just days away, many savers will be looking to use up their Isa allowance for this year or planning ahead for where to invest next year’s.
From April 6 the allowance will increase from £15,240 to £20,000. We’ve asked the experts where they are putting their money.
Rob Burdett, co-head of the F&C Multi- Manager fund, says Old Mutual UK Dynamic Equity has one of the best resourced and most experienced teams in the industry.
While many fund managers ignore the so-called macro environment – how politics or the economy affect investments – and focus just on picking stocks, the Old Mutual team don’t ignore the bigger pic- ture. ‘They put a lot of thought into the macro-economic environment, and it shows in the returns the fund has produced,’ says Burdett.
The fund would have turned £10,000 into £25,330 over the past five years. Its largest investments include online fashion retailer Boohoo and luxury mixer drinks brand Fever-Tree – both of which have soared in the past few years.
Smaller companies have been out of favour for several years but a weaker pound and growing economy could see them thrive. For savers willing to take on a higher risk investment, Bambos Hambi, head of funds at Standard Life Investments, likes the Henderson Emerging Markets Opportunities fund.
This fund has money in companies in India, Brazil, Chile and South Africa among others. While these regions have been in the doldrums, an oil price recovery, increased political stability and fast-growing economies saw a turnaround last year, which Hambi says could continue for a while yet.
If you had invested £10,000 in the fund five years ago it would now be worth £14,320.
The possibility of turmoil in the eurozone might make some savers nervous about investing on the Continent, but experts say there are opportunities to be found.
Marcus Brookes, head of the multi-manager team at Schroders, likes the Invesco Perpetual European Equity fund.
The fund, which would have turned £10,000 into £21,430 over the past five years, targets cheaper, out-of-favour investments such as financial firms Caixabank and Allianz.
The fund has 30pc of its cash in French firms and other investments in Swiss and German companies. Brookes says: ‘While politics may be dominating savers’ views of the Continent, we have begun to see a modest pick-up in the economy and profits forecasts.’
Sheridan Admans, investment research manager at The Share Centre, is also looking to the Continent.
The Man GLG Continental European Growth fund targets companies that manager Rory Power either believes are established leaders or emerging winners in their field. It would have turned £10,000 into £24,590 over the past five years.
Top investments in the fund include Ryanair, which falls into the established leader category as one of the most popular low- cost airlines. Another investment, which falls into the emerging winners group, is jewellery company Pandora, an increasingly popular, affordable luxury brand.
James de Bunsen, co-manager of Henderson Alternative Strategies Trust, is looking at Worldwide Healthcare Trust, which invests in pharmaceutical and biotechnology firms across the globe.
After a stellar run, this industry fell out of favour last year amid fears if Hillary Clinton won the US election she would clamp down on how much pharma firms could profit from their products. De Bunsen says for that reason the sector looks to be good value.
He adds: ‘I think these fears are overplayed and the themes of ageing populations across the world and rising incomes in emerging markets really support the growth of this sector.’
Older populations tend to need more healthcare, and rising wealth means that countries increasingly have the means to pay for it. The investment trust would have turned £10,000 into £31,340 over the past five years.