As regular readers of our Viewpoint magazine will know, we added nine new funds to this list earlier this month.
Here's why we think they are worthy of your consideration:
Fidelity Asia Pacific Opportunities – Fidelity has a very strong Asian equity team and we think this is their very best offering. It invests in companies across the Asia Pacific region, including Australia. The manager, Anthony Srom, is relatively unknown to UK private investors but has many years’ experience in the region and is an exciting prospect in our view. He keeps the fund quite concentrated in just 25-35 stocks and isn't afraid to go away from the benchmark in search of opportunities.
Henderson Emerging Market Opportunities – This fund is run by Glen Finegan and Stephen Deane, who worked together at First State Stewart and Stewart Investors (previously called First State Investments) on the team managing the renowned emerging market equity funds. They use the same investment strategy to find sustainable high quality companies in global emerging markets. They will look everywhere for ideas, at times going very overweight companies in one market and ignoring others completely.
Jupiter Absolute Return – The manager of this fund, James Clunie, is an extremely impressive stock picker. He took on the fund three years ago and changed the investment process. Today, he scours the globe analysing companies to target a positive return across all market conditions over a three-year rolling basis. He has the flexibility to take a position where the fund would profit from a share price decline ('short selling'). Historic characteristics show that it has a low correlation with other asset classes, so the fund will generally perform best in volatile and changing market conditions. Unusually, and positively, for a fund in the absolute return sector, there is no performance fee.
Jupiter UK Special Situations – Managed with a distinct contrarian and value-based approach, this fund offers investors access to a reasonably diversified portfolio of large and mid-cap UK stocks. The manager, Ben Whitmore, is hugely experienced and has had considerable success in running this type of mandate. In essence, he looks to buy stocks that are out of fashion with the market. Because the fund has a strong value style, it will fall in and out of fashion itself as the business cycle evolves. Over the long-term, it has a strong track record.
L&G UK Special Situations – The manager, Richard Penny, took on the management of this fund just under three years ago. It invests in small, medium and large companies across the UK stock market. Richard describes himself as a frugal Yorkshire-man – even when it comes to his investments. He likes to find a bargain, searching for unloved companies that he hopes will double in value over three years. This fund has 30–40 stocks, which are all his best ideas.
Mirabaud Equities Europe Ex-UK Small & Mid – This is a high conviction fund that is very different to most of its peers. Manager Ken Nicholson ignores European politics and most macroeconomic factors, preferring to focus on individual companies. He loves meeting company management and his mantra is “you can’t find the hidden champions by sitting at your desk looking at Bloomberg screens”, so the team has an intensive and targeted road-trip program to meet as many companies as possible. This is the key to the team’s success, along with focus and discipline.
Threadneedle UK Extended Alpha – This fund invests primarily in large UK companies, but with an unusual approach. As the name suggests, the manager, Chris Kinder, aims to extend investors’ potential returns by buying stocks he expects to do well and, when he is not positive on a stock, Chris can take a short position, which means he can make a profit if the share price falls. Those wanting large-cap exposure with a twist could do well to consider this fund.
Schroder High Yield Opportunities – Run by Michael Scott, this fund invests primarily in pan-European high yield bonds and offers a current annual yield of more than 6%*, which is paid monthly. The team combine broad macroeconomic themes—ones they believe will play a major role in global credit markets —and fundamental research—where analysts rank specific issuers they believe will thrive on those themes—to find investments they believe offer the best risk/reward profile.
SVS Church House Tenax Absolute Return Strategies – This fund could be a very useful portfolio diversifier. It is one of just a few in its sector that targets an absolute return from diversification and risk management alone, rather than short selling. It invests directly in different assets, rather than using the fund of funds route, with the managers looking for low correlation and low volatility in the fund's overall value. The managers will invest in fixed interest, equities, property, alternatives and cash, with limits on exposure to each, and they believe that the only risk that matters is the risk of an investment falling in value.
Invest NOW into any of these funds.
*Source: Schroders fund fact sheet, data as at 31 January 2017