Six satellite picks for this years ISA
When managing our investments, many begin with a foundational ‘core’ comprising assets or funds that serve as the primary component of our savings. For some, this core might be a multi-asset fund, managed by professionals, which invests in various assets. Others prefer to construct their own core, typically incorporating UK and global equities along with bonds.
As our portfolio grows and our confidence as investors strengthens, we may gradually introduce satellite or specialised investments. There's no strict guideline for what these satellite investments might entail; it largely depends on the individual investor, their needs, and often their interests. These additions could aim to generate additional income or simply reflect a particular area of interest that has caught their attention.
Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and the ISA and tax rules can change. Chelsea does not offer advice and so you must manage your ISA yourself.
For those looking to add something a little extra to their ISA investment this year, here are six funds to consider:
FSSA Greater China Growth — Run by Martin Lau and Helen Chen, the managers look for well-managed businesses with good corporate governance across Hong Kong, China and Taiwan. Martin has consistently delivered positive performance and has been a firm favourite of ours for a number of years. Martin and the team have shown that they can consistently produce the goods in any type of market environment and it was great news when it reopened to new investors in 2016.
Jupiter Financial Opportunities — This is a concentrated portfolio of ideas from the global financial services sector and associated firms. It will include businesses such as stock exchanges and online payment companies, as well as insurers and banks. The manager prefers businesses with sustainable growth characteristics and identifies these with a thematic approach, which looks at the wider trends driving the economy, and the impact these have on the financial services sector.
Polar Capital Global Insurance — There are few managers with a more intimate knowledge of their market than Nick Martin, the manager of this fund. His many years of experience working in the risk and casualty insurance markets are fundamental to the success of this fund, which provides access to this specialist and often undervalued sector. The fund’s consistent track record offers a good return profile for portfolio diversification.
IFSL Marlborough Global Innovation — This is a concentrated portfolio of fast-growing, innovative companies. It has a heavy weight to technology firms (currently 51%*), but it will invest in innovative disruptive companies from any sector. The fund can invest globally but most of the investments are in the UK or the US (currently 40% and 38% respectively)*. Guy Feld has an exceptional track record, particularly investing in the small-cap end of the market, with at least 50% of the fund invested in smaller companies.
Stewart Investors Asia Pacific Leaders Sustainability — This fund invests in the shares of large and medium-sized companies that are either based in, or have significant operations in the Asia Pacific region including Australia and New Zealand, but excluding Japan. Specific consideration is given to companies that are positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate.
First Sentier Global Listed Infrastructure — Manager Peter Meany is one of the most experienced managers in the space and has been running this fund for over 15 years. The fund seeks to deliver income and some capital growth by investing in listed infrastructure companies around the world and is a recognised leader in listed infrastructure investment. This fund is an alternative method of playing the global equity market with a thematic bias and a reasonable yield.
*Source: fund factsheet, February 2024
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.