Six funds that do the decision-making for you

If you are finding it hard to decide where to invest your money this ISA season, you are probably not alone. Decision making can be difficult and fraught with consequences at the best of times, but it appears lockdown has also made our decision-making worse than usual.

A recent study, led by the Open University of Catalonia, asked 5,000 volunteers from Spain, Italy and the United Kingdom to respond to questionnaires during the first and second waves of the pandemic.

It concluded that the shock produced by the situation has reduced people's cognitive capacity and impaired their decision-making ability.

So if it's indecision that is stopping you from using your ISA allowance this year, it’s understandable – the choice of funds available is huge and it's hard to know whether markets are getting ahead of themselves or if we’ve just begun another lengthy bull run.

To help out, we've highlighted six funds that do the decision-making for you.

1. Growth or Value?

While the manager of T. Rowe Price Global Focused Growth Equity usually has a growth style, he will take advantage of mispriced growth too. He told us last year that value would have its day and it has. And one of the best things about his performance is he has done well in the growth environment but also during the recent value rally.

2. What's best: large, medium or smaller companies?

Marlborough Multi-Cap Growth invests in UK companies of shapes and sizes depending on where the opportunities can be found. The fund will be concentrated in around 50-70 holdings, principally those that are leaders in their sector and that can grow regardless of the prevailing economic landscape.

3. Developed or emerging markets?

Fidelity Global Special Situations invests predominantly of larger companies. The manager uses the breadth of Fidelity's global research team to highlight what he sees as being the best ideas from all around the world. Holdings fall into one of three categories, forming a blended portfolio that can deliver consistently through all market conditions.

4. Will the stock market go up or will it fall?

Janus Henderson UK Absolute Return can make money by investing in companies the manager thinks will do well, in the hope that the stock price will rise over time. It can also make money when the price of a stock falls, by 'shorting' it. It is called a long/short targeted absolute return fund and aims to achieve a positive absolute return for investors regardless of market conditions.

5. Which is best? Government or corporate bonds?

Invesco Monthly Income Plus has a flexible mandate to invest in any type of bond. It was designed to offer investors broad exposure to the UK fixed income market and provide a high level of income, paid monthly. The fact that the fund can, and often does, have a 20% allocation to equities is a genuine differentiator.

6. Which asset class should I pick?

VT Chelsea Managed Balanced Growth is a fund-of-funds that has a target weighting of between 50% and 70% in UK and overseas equities, although it will also invest in other assets including bonds, property, gold and targeted absolute return strategies, depending on where the investment team thinks it can find the best opportunities.

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 view expressed are those of the author and do not constitute financial advice.

Published on 29/03/2021