The year end is a natural time for people to review their investment portfolios and ensure it is well positioned for the year ahead. Ryan Hughes, head of investment research at AJ Bell, looks at eight funds and investment trusts with different risk levels covering bonds, global equities, infrastructure, healthcare and dividends.
Personal Assets IT
“I’m sticking with the Personal Assets trust for the 3rd year in a row, particularly as the economic scenario that experienced manager Sebastian Lyon at Troy has been worrying about seems to be coming to fruition. With jittery equity markets and fears over inflation remaining elevated for a considerable period, the defensive positioning of this trust, and in particular its exposure to inflation protecting assets such as gold and inflation linked bonds should sit well for the year ahead. The portfolio is relatively unchanged from a year ago with 11% in gold and 31% in index linked bonds supporting the core exposure to high quality equities such as Microsoft, Visa and Nestle. As a result, the trust works well in providing investors with an instantly diversified portfolio and given the emphasis on capital protection should sit comfortably with cautious investors.”
Fidelity Short Duration Corporate Bond fund
“With high inflation and interest rates expected to increase, it could be a challenging time for fixed interest but many investors will still want to hold bonds as part of a diversified portfolio. Keeping duration short should help dampen volatility and protect against capital losses and therefore the Fidelity Short Dated Corporate Bond fund may work well with its focus on the higher quality part of the UK corporate bond market. The fund is managed by the highly experienced Sajiv Vaid and backed by the usual extensive resources at Fidelity. Unusually, this fund has flown a little under the radar and therefore is only £150m in size making it easier for the managers to adjust the positioning, while the fund is very diversified as it is spread across well over 100 different companies with names such as Lloyds Bank, Anglian Water and Heathrow featuring in the largest holdings.”
“For many balanced investors, exposure to global equities is a core element of a portfolio and the Monks IT provides investors with a highly credible actively managed trust from the Baillie Gifford stable. While slightly in the shadow of its illustrious Scottish Mortgage cousin, Monks is much more diversified and less volatile and therefore works well for balanced investors wanting global exposure. Importantly, the trust still has the growth focus that Baillie Gifford is synonymous with but in a more controlled manner and still has exposure to the likes of Tesla, Alphabet and Microsoft as well as many other smaller positions too. Well managed by experienced investors, this trust brings global exposure for an OCF of 0.43% per annum.”
First Sentier Global Listed Infrastructure fund
“As the world emerges from hibernation following on from the Covid lockdowns and economies look to get back to full throttle, the importance of high-quality infrastructure has been clearly evidenced. Whether it is through energy needs, distribution networks or communication services, infrastructure is a key part of a fully functioning economy. The First Sentier Global Listed Infrastructure fund looks to provide exposure to all of these areas and more in a global portfolio of infrastructure companies. With over 40% invested in energy related companies, it provides exposure to many who are leading on energy transformation while also giving exposure to critical distribution infrastructure such as railroads and toll roads. The fund benefits from the experienced team at First Sentier based in Australia who have been at the forefront of infrastructure investing for many years.”