As ‘panic’ hits mar­kets, five op­por­tu­ni­ties not to miss

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Faced with on­go­ing tur­moil in fi­nan­cial mar­kets, how can in­vestors fight back against the slump? Adam Wil­liams re­ports

Af­ter a week of tur­bu­lence, in­vestors could be for­given for feel­ing anx­ious about their port­fo­lios. Any pe­riod of poor per­for­mance in the mar­kets is likely to set nerves on edge, but such cor­rec­tions also of­fer in­vestors who can look past the short-term noise the chance to buy com­pa­nies, funds and trusts that have sud­denly be­come un­der­val­ued.

As in­vestors ex­pe­ri­enced this week, mar­ket cor­rec­tions drag down the value of all firms. In­vestors who can hold their nerve in a fall­ing mar­ket now have an op­por­tu­nity to buy those com­pa­nies which they have pre­vi­ously eyed up, but shied away from be­cause of their high cost. Si­mon Edel­sten, of the Mid Wynd In­ter­na­tional In­vest­ment Trust, said: “I haven’t seen eq­uity mar­kets panic like this in eight years. But cor­rec­tions on this scale are like shop­ping op­por­tu­ni­ties.”

Will Hobbs, of Bar­clays Smart In­vestor, a fund shop, de­scribed the losses as “gut churn­ing” but told in­vestors not to panic at the re­cent sell-off. “The best ad­vice at times like this is to stay calm,” he said. “There are at­trac­tive op­por­tu­ni­ties for those who can keep their cool.”

For in­di­vid­u­als who have seen the value of their port­fo­lio slump, this is a good op­por­tu­nity to re­assess and make sure they are fully pre­pared for any chal­lenges ahead.

Think about the long term. Even if in­di­vid­ual com­pa­nies have lost value, do the fun­da­men­tals re­main strong?

If so, con­sider per­se­ver­ing rather than sell­ing low. In fact, if the price has fallen it may be a good time for in­vestors to in­crease cer­tain hold­ings. Set up a “crash list” of hold­ings that are fun­da­men­tally strong. When their value dips along with the wider mar­ket, take the op­por­tu­nity to buy.

Cau­tious in­vestors may also like to bring some of their wealth back into cash. De­fen­sively po­si­tioned funds have al­ready taken such ac­tion. The Ruf­fer Eq­uity & Gen­eral fund cur­rently holds 26pc cash, while the Schroder MM Di­ver­sity fund has 23pc. Hav­ing ex­tra cash also al­lows in­vestors to act quickly to snap up bar­gains when the time comes.

For those look­ing for bar­gains amid the cur­rent tur­moil, Tele­graph Money has found five op­por­tu­ni­ties to con­sider.

Rath­bone Global Op­por­tu­ni­ties

This well-re­garded fund has a di­verse port­fo­lio of global com­pa­nies. Dar­ius McDer­mott, of Chelsea Fi­nan­cial Ser­vices, a fi­nan­cial ad­viser, said it had fallen in value since last month, mean­ing it now of­fered an at­trac­tive en­try point for in­vestors.

Emma-Lou Mont­gomery, of Fidelity Per­sonal In­vest­ing, added: “As well as global brands like Ama­zon and Visa, this fund has de­fen­sive hold­ings that are less eco­nom­i­cally sen­si­tive. This is use­ful in the cur­rent en­vi­ron­ment.”

Scot­tish Mort­gage Trust

De­spite be­ing one of the top per­form­ers in re­cent years, Scot­tish Mort­gage has not been im­mune to the mar­ket slump. Mr McDer­mott said its price had fallen by about 20pc in the past week and this was at­trac­tive for in­vestors with a long-term out­look. The trust fo­cuses on growth stocks that have good re­turns on cap­i­tal, al­low­ing re­turns to com­pound over time, he said.

Lind­sell Train UK Eq­uity Fund

Danny Cox, of Har­g­reaves Lans­down, the stock­bro­ker, said there had been a big­ger sell-off of smaller and medi­um­sized com­pa­nies in the FTSE 350 than those in the FTSE 100.

Funds like this, which con­cen­trate on larger com­pa­nies, will be less af­fected by the mar­ket panic, he said.

Ms Mont­gomery added: “This

ap­proach means that the fund is filled with big brands like Di­a­geo, Unilever and Heineken, which are able to weather any storm.”

Jupiter Euro­pean Op­por­tu­ni­ties

The price of this trust, man­aged by Alexan­der Dar­wall, has suf­fered in the re­cent sell-off. But Mr Cox backed its team to con­tinue their re­cent strong per­for­mance.

With in­vest­ments in di­verse, multi­na­tional com­pa­nies, this is an­other ex­am­ple of a trust with hold­ings in strong growth stocks that de­liver at­trac­tive re­turns.

Matthews Asia Pa­cific Tiger

Given the sharp sell-off in many Asian mar­kets, their com­pa­nies are now far cheaper. Asia Pa­cific Tiger has fallen with the mar­ket, los­ing about 10pc of its value since Jan­uary.

How­ever, Mr McDer­mott said this fund took a very long-term view and was well-po­si­tioned to ben­e­fit from fu­ture growth in con­sumer spend­ing, given its bias in favour of do­mes­tic busi­nesses in Asia.

Bonus tip: lux­ury pur­chases

When look­ing at in­di­vid­ual com­pa­nies, Mr Cox said the fu­ture was pos­i­tive for lux­ury brands such as fash­ion house Burberry and LVMH, owner of the Louis Vuit­ton cloth­ing brand and Hen­nessy cognac.

In­vestors should be wary of the slow­down in the Chi­nese econ­omy, Mr Cox said, given this is where much of the lux­ury sec­tor’s growth has come from. But he added that the top-end brands were now well-priced af­ter the re­cent sell-off.

“In un­cer­tain times, lux­ury spend­ing is of­ten the first to be side­lined,” he said. “But com­pa­nies with ex­cep­tional prod­ucts and ser­vices al­ways have an edge over their ri­vals.”

Asia Pa­cific Tiger takes a long-term view

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