Fund and investment tips for 2016

23 December 2015

Witan Investment Trust

This is a diversified global equity investment trust, which has been running since 1909 and uses a multi-manager approach, with 12 third-party managers having responsibility for the six underlying investment mandates. It often utilises little-known but good- quality specialist managers such as Veritas, Lindsell Train, Matthews, Pzena and Landsdowne.This approach has worked well and performance has been very strong. It is an ideal buy-and-hold fund for long-term investors such as those investing for retirement or on behalf of children. I invest in this trust for my son’s Junior Isa.

HSBC FTSE All Share Index

Investors should have long-term exposure to the UK stockmarket and the advantages of investing in a tracker fund are lower charges, little likelihood of significant underperformance and no concerns about fund managers leaving.

The HSBC FTSE All Share Index fund aims to track the performance of the FTSE All Share Index, so the largest holdings will always be in the biggest companies listed on the London Stock Exchange and include the likes of HSBC, Royal Dutch Shell and BP.

The fund uses full replication of stocks for all of the major shares in the index [buying shares of each company in the index according to its relative weight in the index] and has an annual charge of just 0.07%.

Fundsmith Equity

The investment strategy for this fund is to invest in a concentrated portfolio of good-quality, large, liquid companies which make their money from repeatable business and then do nothing.

The fund manager is trying to buy today’s winners rather than tomorrow’s winners, but to buy them at the right price. He won’t try to time markets, hedge, trade frequently or panic.

This approach is proving very successful as the fund has given significant outperformance on the upside, while also doing a good job of protecting investors’ money on the downside.

JPM Multi Asset Income

This fund looks to achieve the best risk-adjusted income, which can be taken monthly, quarterly or reinvested for growth, by investing in a wide range of underlying assets including equities, fixed interest and REITs (real estate investment trusts, which invest in property).

It is ideal for a cautious investor as it targets capital preservation and low volatility by investing in around 1,500 underlying holdings.

Schroder Multi Manager Diversity

This is an ideal choice for a novice or cautious investor, essentially being a whole portfolio in one fund. It usually invests about one third in equities, one third in cash and fixed interest and one third in alternative investments such as hedge funds and commodities.

However, because the managers are worried about current asset prices, it has been very defensively positioned for some time. This should provide a good level of protection for investors.

BlackRock European Dynamic

This is an aggressive stockpicking fund, managed by Alistair Hibbert, who has proven himself to be one of the best European fund managers in the business. It has no benchmark constraints, as it seeks to find high-growth, under-researched companies, with the manager aiming to outperform by 5% a year, which is certainly a challenging target.

The fund could reward investors in a region where ongoing stimulus action from the central bank could boost European stocks generally.