Investors racing to use up their Isa allowance before this year’s deadline may be wondering in which funds they should stash their cash. After a tumultuous year on global stock markets, it’s difficult to know whether to go for growth or play it safe by choosing a fund that focuses on protecting your capital. Here are three options that might suit:
Artemis Global Select
Morningstar analysts rate Artemis Global Select as a “compelling” option for investors looking for exposure to equities across the globe. Despite a rollercoaster year on global markets, the fund returned 16.7% in 2020 and longer-term performance has been strong too, with annualised returns of 15.17% over 10 years.
The Silver-rated fund has been managed by Simon Edelsten, Alex Illingworth and Rosanna Burcheri since its 2011 launch and focuses on quality businesses posed to benefit from long-term trends, with limited exposure to external factors. With that in mind, it’s no surprise there is little exposure to likes of energy and commodities stocks in the portfolio. Instead investors will recognise strong brands in its top holdings including Amazon.com, luxury goods firm LVHM and payments giant Mastercard. Some 16.5% of assets are invested in the healthcare sector and the largest holding in the portfolio is Becton, Dickinson and Co, a UK medical technology company whose products help in the treatment of diabetes, women’s health and cancer among other areas.
Morningstar analyst Fatima Khizou likes that the three managers are invested in the fund “helping to align their interests with investors”. She adds: “They try to avoid any unintended risks and this prudent approach has resulted in an attractive risk/reward profile over the long-term.”
L&G Multi Index 5
This fund is one in a range of risk-targeted funds, and invests in a portfolio of tracker funds to offer exposure to equities, fixed income and other assets while keeping costs down – indeed, the fund’s annual charge is just 0.24%.
The Multi-Index funds range from 3 to 7, so this offering is middling in terms of its risk profile and aims to deliver a combination of growth and income. That medium risk profile means performance hasn’t shot the light out but the fund did finish 2020 in positive territory, up 6%, and has delivered annualised returns of almost 8% over the past five years.
Around a third of the portfolio is invested in the US, 20% in the UK and 12% in Japan, all through L&G passive funds, and there is also a UK corporate bond index tracker among its top holdings. Additionally, the fund incorporates some of the firm’s active funds in areas such as high-yield, emerging markets debt and property to help boost returns. Morningstar analyst Rajesh Yadav praises the Silver-rated fund as being transparent, cost-effective and with a respectable track record.
Troy Trojan
Troy Trojan’s focus on capital preservation makes it a popular option with investors looking for a steadier ride and protection from market falls. Yadav rates its experienced manager, Sebastian Lyon, and consistent use of a straightforward process.
Positioned in the Morningstar Flexible Allocation category, the fund can invest across asset classes and seeks to deliver long-term growth. It has delivered annualised returns of 5.22% over five years, and finished 2020 in positive territory, up 7.4.% The largest position in the portfolio currently is a Gold Bullion Securities ETC, accounting for 6.8% of assets. Also among the top holdings are tech giant Microsoft (almost half of the fund’s assets are in equities) and US Treasury bonds.
Yadav says: “Lyon is a cautious investor who believes that preservation of wealth is an important step in the overall growth of assets in the long-term. This ethos has served him and investors well in the Trojan strategy.”
