Five financial resolutions for 2024
It’s that time again when we put together our new year’s resolutions. Alongside resolving to eat healthily, hit the gym or take up a new hobby, adding some financial pledges to your list could do wonders for your well-being.
Here are five commitments that could give your investment portfolio a much-needed boost and start 2024 off on the right foot.
Resolution one: Boost your green credentials
Many of us will have committed to improving our environmental footprint this year, but did you know that moving to "greener" investments could do more to tackle climate change than driving an electric car or having a vegan diet?^ It is not only kind to the planet, but also potentially lucrative. Opting for a fund in this area gives you access to important themes, as well as to some of the most innovative, creative businesses on the planet.
One fund investors might consider is Artemis Positive Future, which aims to grow capital over a five year period by investing in companies that have a good impact on the world. Its four-strong management team – made up of Craig Bonthron, Neil Goddin, Jonathan Parsons and Ryan Smith – search for businesses that are making environmental or social improvements.
Another option is the CT Responsible Global Equity fund. This invests in quality growth companies from across the world, with a focus on sustainability. Managers Jamie Jenkins and Nick Henderson have forged reputations as stock pickers with long-term approaches. They’re also supported by an independent sustainability team.
Resolution two: Embrace the world
It’s very easy for investors to become too focused on UK-listed companies and overlook the myriad opportunities across the world. Having a broader geographical spread will also give your overall portfolio some extra diversification, particularly beneficial at a time when the UK’s economic outlook is lacklustre.
The Capital Group New Perspective fund, which aims to achieve long-term capital growth, has a track record dating back more than half a century. Its managers invest in some of the world’s largest, multinational firms that are expected to benefit from transformational changes in the global economy, including Novo Nordisk and TSMC*.
While it can invest in any company, the JOHCM Global Opportunities fund has a particular focus on larger and medium sized businesses with international revenue streams. Its manager, Ben Leyland, takes a highly active and unconstrained approach, while always having an eye on capital preservation.
Resolution three: Achieve a good balance
While there are many schools of thought on the best way to invest, most people agree that diversification is beneficial for long-term returns. In recent years, the dominance of a handful of technology companies has left many portfolios looking unbalanced. It is worth looking at your overall portfolio to see if you are too heavily weighted towards one asset class, such as equities, or individual sectors or regions, and making it one of your resolutions to even out your exposure.
One way to do so is through multi-asset funds. Our VT Chelsea Managed funds have been designed by our in-house research team to offer Chelsea’s clients a one-stop shop, as well as giving them access to the Chelsea research team’s most up-to-date investment views and fund preferences.
The VT Chelsea Managed Balanced Growth fund is designed to strike a sensible balance between different types of assets by holding diverse, yet complementary, funds in this portfolio. The target equity weighting is 50-70%.
Resolution four: Put safety first
The past few years have demonstrated that risks can emerge from the most unexpected quarters at the most unexpected times. It’s always worth ensuring you have some safeguards in place – and corporate bond exposure can help tick that box in a diversified portfolio. We believe that the coming year is likely to be better for bonds than 2023 and the good news is there are a number of funds that can provide exposure.
The Invesco Corporate Bond fund, which aims to achieve income and capital growth over periods of at least three to five years, is also worth considering. The fund benefits from experienced managers that make the most of the analytical resources within Invesco to create a flexible, unconstrained portfolio.
Resolution five: Boost your income
Who couldn’t use a little extra income? At a time when most people’s finances are looking stretched, an income generating fund could be attractive. Income funds tend to be made up of shares in established, stable companies that have a built a reputation for paying out decent dividends.
It’s a sector with plenty of choice. For example, there’s the JPM Global Equity Income fund. This fund invests in large and mega cap stocks across the world, including emerging markets. The managers also pay close attention to risk, while the focus on dividend growth should ensure that the payouts grow over time.
Meanwhile, the CT UK Equity Income fund searches for companies exhibiting above average income potential. Most of its holdings – at least 90% – are listed on the London Stock Exchange. The fund has a patient, high-conviction approach and has proven to be extremely consistent over many years.
Looking for multi-asset solutions delivering income? Look no further than the popular VT Chelsea Managed Monthly Income fund, which is now yielding 5.70% paid monthly**. Income is smoothed to pay a roughly level amount over 11 months, with a final adjustment payment in the 12th month. 2023 marked the fifth consecutive year that the final distribution dividend was significantly higher at 3.5 times the normal amount.
^Source: Make My Money Matter
*Source: fund factsheet, 30 November 2023
**Source: fund factsheet, 30 September 2023
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and fund managers and do not constitute financial advice.