C OVER STORY Where to invest ii MOST-BOUGHT FUNDS 2018 RANK FUND 1 Fundsmith Equity I Inc* 2 Lindsell Train Global Equity B GBP* 3 Vanguard LifeStrategy 80% Equity A 4 Vanguard LifeStrategy 100% Equity A* 5 Vanguard LifeStrategy 60% Equity A* 6 Jupiter India I Acc 7 Legg Mason IF Japan Equity X 8 Vanguard FTSE Developed World ex-UK Equity Index A* 9 Marlborough UK Micro Cap Growth P Acc* 10 Baillie Gifford Global Discovery B Acc * Denotes a Moneywise First 50 Fund for beginner investors. Source: interactive investor, March 2019
the Investec Cautious Managed fund. It spreads risks by investing into other asset classes alongside shares, such as government bonds, gold and cash.
Mr Modray says the Vanguard LifeStrategy* range of funds offer a cheap and convenient way of investing your money across global stock markets and fixed-interest investments such as government and corporate bonds. There are five options, ranging from 20% stock-market exposure to 100%, so they should suit most needs. The 20%, 60% and 100% equity versions are members of the Moneywise First 50 Funds for beginners.
Peter Chadborn, director and adviser at Plan Money,
recommends a fund with a cautious objective for someone starting out with just £50 a month.
“We require a low-cost, globally diversified, risk-controlled solution and, of course, good, consistent past performance. To meet these criteria, I would suggest the Vanguard LifeStrategy 60% Equity fund*,” he says.
If you are happy to have all your money in higher-risk company shares, Mr Connolly recommends a “good low-cost UK tracker fund” that will give broad exposure to the UK stock market. He likes the HSBC FTSE All Share Index fund.
For those who are happy to take greater risk, then exposure to more volatile areas such ii MOST-BOUGHT INVESTMENT TRUSTS 2018 RANK INVESTMENT TRUSTS 1 Scottish Mortgage (SMT)* 2 City of London Investment Trust (CTY)* 3 Witan Investment Trust (WTAN)* 4 F&C Investment Trust (FCIT) 5 Finsbury Growth & Income (FGT)* 6 Edinburgh Investment Trust (EDIN) 7 Bankers Investment Trust (BNKR) 8 RIT Capital Partners (RCP) 9 Murray International (MYI)* 10 HICL Infrastructure (HICL) * Denotes a Moneywise First 50 Fund for beginner investors. Source: interactive investor, March 2019
as emerging markets can be considered.
“These have the potential to perform very well over the long term,” adds Mr Connolly.
“A good choice is the JPM Emerging Markets fund.”
£250 A MONTH Mr Modray says: “Larger sums of money make it practical to put together a basket of funds that gives you exposure to several asset types that are unlikely to all move in the same direction at the same time. It can also make sense to add further diversity by combining cheap stock-market tracking funds with active managers who invest quite differently. At the very least, I’d suggest exposure to UK and overseas stock markets, fixed interest [usually bonds] and commercial property.”
Darius McDermott, managing director at Chelsea Financial Services, suggests the following strategy: “For cautious investors – perhaps someone making the transition to investing in other asset classes other than cash for the first time – I would suggest a mix of a more defensive UK equity income fund and a targeted absolute return fund.
“An equity income fund is a way of getting exposure to the stock market but at the same time should be less volatile than a growth. Whichever funds you go for, review your choices regularly – at least once a year and preferably every six months.
Recommendations In the UK Equity Income sector, Mr McDermott likes the Artemis Income fund. He says the managers invest for both value and growth, and the fund has a consistent yield at around 4.1%.
In the Targeted Absolute Return sector, he favours SVS Church House Tenax Absolute Return Strategies, which he says is “one of the few funds in the sector to target an absolute return
10 MONEYWISE.CO.UK | APRIL 2019