Sensible ideas to invest a £50,000 windfall

Some consistent themes emerged: for example, there are evidently some self-styled contrarians among us. But it's also striking how diverse the selection is. It will be interesting to see how our fantasies have fared in a year's time.


Schroder Oriental Income (£30,000)

The Far East ex Japan has been out of favour for a couple of years, yet many of the countries in the region have comparatively low borrowings, increasingly diversified economies and good demographics - and share prices are now on much less demanding valuations than those in the West.

Schroder Oriental Income's experienced manager, Matthew Dobbs, is strongly supported by Schroders' regionally based research analysts. The trust's net asset value (NAV) returns have been comfortably ahead of the MSCI AC Pacific ex Japan index, and it currently yields more than 4%. Moreover, the shares are not on a demanding premium.

Fiona Hamilton

Scottish Mortgage IT (£25,000)

Managed by James Anderson at Scottish partnership Baillie Gifford, Scottish Mortgage Investment Trust aims to generate a return ahead of the FT World Index over a five-year rolling period.

It has comfortably achieved that over the past five years, with a return of 226% in share price terms, more than twice that of the index; over 10 years, the share price has returned 314% against the index's 132%. It's also cheap, with an annual management charge of 0.32%. The discount is a relatively low 3.6%.

Heather Connon

Invesco Perpetual Income (£25,000)

My sensible investment is Invesco Perpetual Income. Anyone who thinks that is not so sensible now that star manager Neil Woodford has departed has not looked at the impressive record of his replacement, Mark Barnett. Since Barnett took over Invesco Perpetual's UK Strategic fund in 2006, its performance has been significantly better than that of IP Income.

One reason is the wider mandate of UK Strategic, which has enabled him to hold more high-performing small-cap stocks. But Barnett has been running money for more than two decades, mostly at Invesco, and his performance has been exemplary throughout. Moreover, Woodford's record in part reflects the team approach of Invesco's equities division.

David Prosser

Personal Assets IT (£35,000)

Sometimes, a run of poor performance can be an opportunity to pick up a great manager at lower cost. As a lower-risk investment, the Personal Assets investment trust fits the bill. Manager Sebastian Lyon is a thoughtful, conviction-driven manager.

However, 2013 saw him positioned too bearishly with a heavy weighting to gold and low weightings to equities. As a result he is now fourth quartile over the past 12 months and this could be a good time to buy into the trust. Personal Assets has a capital preservation mandate, and this mindset could serve investors well in the next 12 months.

Cherry Reynard

Fundsmith Equity (£35,000)

Launched in 2010 by City of London legend Terry Smith, Fundsmith Equity has returned 64.2% as at 1 May.

Smith follows a strict set of investment principles, which boil down to making long-term investments in attractively valued, large global companies with specific characteristics. Businesses must be able to sustain a high return on operating capital; not need significant leverage to generate those returns; have a high degree of certainty of growth from reinvestment of cash flows; and be resilient to changing business conditions and innovation.

The fund currently has just 25 holdings, mainly in the consumer staples and healthcare sectors. It is the largest holding in my personal pension, and requires little monitoring.

Andrew Pitts

Unicorn Mastertrust (£30,000)

The tiny Unicorn Mastertrust has more than tripled to £17 million of assets under management in the past year. Manager Peter Walls runs a diverse portfolio comprising around 45 investment trusts, with Acorn Income, TR Property and Templeton Emerging Markets among its top 10 holdings.

He aims to spread the fund across both geographies and asset classes, and then adjusts allocations in the light of changes to discounts, gearing, new issues and volatility. The double layer of charges is a disincentive, but as Walls observes: "the investment trust sector lends itself well to managers adding value through expertise and understanding."

The fund has ranked consistently within the top decile of the 200-strong IMA flexible investment sector over one, three and five years.

Faith Glasgow

British Empire Securities IT (£35,000)

My solid investment choice is Asset Value Investors' British Empire Securities & General Trust. British Empire has taken a battering and is a bottom-quartile performer over one, three and five years. However, the trust has been enjoying a turnaround in fortune of late, as its inherent value style is coming back into fashion.

Over the year to date the fund has returned 2.1% compared to a loss of 0.27% for its sector, IT Global. Its holdings include French telecoms firm Vivendi which has benefited from a pick-up in corporate activity. At a discount of more than 13%, it represents a value opportunity in a sector with narrowing discounts.

Rebecca Jones

Camellia (£33,400)

Camellia is a worldwide conglomerate, the owner of many agricultural, engineering and distribution businesses and a private bank. Its history goes back centuries, and its strategy at least to 1991, when the then chairman pledged it to the continuous refinement and improvement of its businesses for the long term.

By saving money in the good times and investing consistently through thick and thin, Camellia has, over the past two decades, derived stability and profit from the cyclical markets it serves.

Its majority shareholder is a charitable trust, its executives receive no performance-related bonuses, and it has a large cash surplus. A share price of £100 values the equity at nearly £275 million, almost £100 million less than the company's net assets - a discount of 25%.

Richard Beddard

This feature was written for our sister publication Money Observer

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