Nine global fund and trust tips for 2017
16th January 2017 11:28
by Faith Glasgow from interactive investor
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These funds, split into core and adventurous brackets, are tipped by our expert panel to perform well over the coming 12 months.
You can find profiles of our panellists at the end of this article.
Rathbone global opportunities
Core growth
Our panel agree stands out in the 223-strong global sector. Under the management of James Thomson, the fund is 30% ahead of the average global fund over the past five years.
Alan Steel likes Thomson's style of seeking out "undervalued companies", while Rob Burdett compliments the manager's "concentrated approach". Thomson is currently steering clear of the emerging market regions, instead favouring the US.
Troy Trojan
Core growth
Steel describes as his "first choice goalkeeper" due to its focus on delivering capital appreciation with low volatility.
He says the fund has proved its worth in falling markets over the years due to its asset mix, which usually consists of 40% in high-quality equities, with the rest held in fixed interest, gold and cash.
Mick Gilligan is also a fan of Sebastian Lyon, the fund manager at the helm.
Invesco Perpetual Global Smaller Companies
Adventurous growth
For those willing to stomach higher levels of volatility in pursuit of higher returns, a small-cap strategy may fit the bill.
is truly global, with just 10% of assets in the UK. The US weighting, at 30%, is much lower than that of other global funds.
Brian Dennehy says: "With more countries switching to fiscal stimulus to encourage their domestic economies, small-cap funds should be buoyed."
Fidelity Global Dividend
Core growth and income
has been a strong performer since launch in February 2012, posting gains of 100% and leaving rival funds in the shade. Mick Gilligan is backing the fund to deliver again in 2017.
"Manager Dan Roberts' investment approach is to focus on well-managed companies with robust balance sheets and strong cash conversion," says Gilligan.
"This should help the fund navigate through the heightened political and economic uncertainties impacting markets at this time."
Lazard Global Equity Income
Adventurous growth and income
is an underperformer in terms of performance over three and five years, but there are signs that a turnaround has started to take place, with the fund climbing up the league table over the past year.
This has been driven by the improving fortunes of emerging market equities, where the fund is 'overweight'. Burdett adds: "The way the fund is positioned may satisfy the more adventurous investor."
Monks
Core growth
has been rejuvenated since Baillie Gifford's (BG's) global alpha team took charge in March 2015.
As a result, Jean Matterson and Peter Hewitt both believe it is currently an attractive way to access BG's long-term, growth-oriented approach to investing internationally.
Matterson says Monks' new team focuses on stocks with the potential to double in price over five years through re-rating, earnings growth, or a combination of the two.
Hewitt says the trust has a better-balanced portfolio than BG's much more highly rated , with much smaller bets on technology shares. The trust's UK weighting is only 8%.
Bankers
Core growth and income
is a large, low-cost global trust with 31% exposure to the UK.
Tim Cockerill likes it because responsibility for its portfolio is split between six well-regarded regional specialists, headed since 2003 by Alex Crooke, who oversees the asset allocation.
Also, the trust is committed to growing its dividend - which Cockerill says is increasingly rare in the global sector - and has done so for the past 49 years.
Law Debenture Corporation
Core growth and income
, or "Law Deb", as many refer to it, combines a mainstream equity portfolio - managed by the highly regarded James Henderson - with an independent fiduciary services business that provides a substantial second source of income.
Although the majority of its holdings are UK-quoted, they are international in terms of where their revenues and profits arise. John Newlands believes the trust looks attractive on its current yield and discount.
BlackRock World Mining
Adventurous growth and income
When Alan Borrows picked last year, he warned that it would cut its dividend. In the event, the cut was more than he expected, but the yield remains very attractive and he thinks the current dividend is sustainable.
He says the outlook for the trust's portfolio has improved because a lot of capital has been withdrawn from the resources arena, reducing competition for the surviving companies.
Meet our fund panellists
Robert Burdett
Robert Burdett began managing funds of funds at Rothschild and then Credit Suisse. In 2007 he joined Thames River to help set up its multi-manager business, later taken over by F&C.
Brian Dennehy
Brian Dennehy is managing director of advisory firm Dennehy Weller. In 2012 he launched FundExpert, a fund platform for self-directed investors looking for fund research.
Mick Gilligan
Mick Gilligan is a partner in private client stockbroker Killik & Co. He is currently head of research. He analyses funds and trusts and manages the firm's multi-manager portfolio service.
Jason Broomer
Jason Broomer has more than two decades' experience in fund research and running portfolios for private clients. He runs Square Mile's managed portfolio service.
John Husselbee
John Husselbee is head of the Liontrust multi-asset team. He has 25 years of experience in managing multi-manager portfolios, including at Henderson and Rothschild.
Alan Steel
Alan Steel became an IFA in 1973, and launched his firm Alan Steel Asset Management in 1975. It now advises over 2,000 families, with more than £1 billion under management.
Meet our investment trust panellists
Alan Borrows
Alan Borrows is a senior fund manager at Liverpool-based Seneca Investment Managers, which favours a value-oriented approach to multi-asset investment.
Jean Matterson
Jean Matterson is a partner at Edinburgh-based Rossie House Investment Management, which has long favoured investment trusts for private client portfolios.
John Newlands
John Newlands has overall responsibility for investment trust research at Brewin Dolphin. It has £33 billion under management, of which over £4 billion is in investment trusts.
Tim Cockerill
Tim Cockerill is investment director of Bristol-based Rowan Dartington which has client assets in excess of £1 billion. Investment trusts have featured in its portfolios for many years.
Andrew McHattie
Andrew McHattie runs The McHattie Group, an authorised firm which publishes a specialist investment newsletter. He has been the editor of Investment Trust Newsletter since 1966.
Peter Hewitt
Peter Hewitt has run the since 2008, having managed its forerunner, F&C Managed Portfolio Service, since 2002. He previously worked at Ivory & Sime.
This article was originally published in our sister magazine Money Observer. Click here to subscribe.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.