Seven most recommended funds from 10 investment platforms

Once you’ve decided to invest in a stocks and shares Isa, you need to decide what investments to hold in it. But there are thousands of funds to choose from and it’s hard to narrow down the choice yourself.

Many DIY investment platforms offer lists of 50 to 150 recommended funds, which they promote to investors as the best funds available on the market, as researched by their independent analysts.

We examined the fund select lists on 10 investment platforms: AXA Self Investor, Barclays Stockbrokers, Bestinvest, Charles Stanley Direct, Chelsea Financial Services, Close Brothers, Fidelity, Hargreaves Lansdown, The Share Centre, and Trustnet Direct.

We expected to find lots of common recommendations among the select lists but this wasn’t the case.

In total, 338 funds were recommended. But 217 of these funds only received one recommendation across all ten platforms.

In fact, the 10 platforms only agreed on one fund, and only 16 funds received five or more recommendations.

You can see the 32 funds that received four or more recommendations in the table below.
Here’s a bit more detail about the seven funds that received six or more recommendations.

Stewart Investors Asia Pacific Leaders*

Number of platform recommendations: 10/10

Ongoing charges figure: 0.91%

Its goal is to achieve long-term capital growth from a portfolio of large and medium-sized companies in the Asia Pacific region, including Australia and New Zealand, but excluding Japan. Each potential investment is evaluated according to seven principles which include: looking for companies that treat their investors fairly, avoiding capital losses, examining company fundamentals and not investing for the short term.

AXA Framlington UK Select Opportunities*

Number of platform recommendations: 7/10

Ongoing charges figure: 0.83%

Run by very experienced and highly respected Nigel Thomas, a manager with over 30 years' experience, it can invest in UK companies of any size. Although the fund has not always been top of the pops in the performance charts, its long-term record has been impressive.

CF Woodford Equity Income*

Number of platform recommendations: 7/10

Ongoing charges figure: 0.75%

Managed by the UK’s best- known fund manager, Neil Woodford, this invests primarily in UK-listed companies. It aims to provide a reasonable level of income together with capital growth.

Fidelity MoneyBuilder Income*

Number of platform recommendations: 6/10

Ongoing charges figure: 0.56%

A relatively conservatively managed, high-quality, investment-grade corporate bond portfolio, it aims to provide an attractive level of income and predominantly invests in UK fixed-interest securities, with some exposure to other developed markets.

JPM US Equity Income Fund

Number of platform recommendations: 6/10

Ongoing charges figure: 0.93%

It aims to share in the future growth of the US stock market by investing in high quality, attractively valued companies in any economic sector that have healthy and sustainable dividend yields.

Liontrust Special Situations

Number of platform recommendations: 6/10

Ongoing charges figure: 0.88%

It’s a UK equity fund with a distinct process looking for UK companies with a strong defendable business franchise. The fund typically has a bias to medium- and small-sized UK companies in a relatively concentrated portfolio with low turnover.

Schroder Tokyo

Number of platform recommendations: 6/10

Ongoing charges figure: 0.91%

It aims to achieve capital appreciation through participation in the growth of the Japanese economy. Investment will be based primarily on Japan’s economic strengths, such as its manufacturing industry (in particular on those parts of it that are demonstrating an ability to exploit newly emerging technology) and on sectors benefiting from structural change in the economy.

Click the table below to enlarge (click back in your browser to return to the article):

 

 

How the platforms choose funds

Most of the fund select lists only include actively managed ‘open-ended’ funds. An open-ended fund is another word for a unit trust or an oeic. Open-ended funds will get bigger as more investors buy into the fund and smaller as investors sell their holdings.

Actively managed funds have a professional fund manager who buys and sells stocks and shares to hold in the fund. An active fund will try to beat a benchmark, usually a stock market index, for example the FTSE All Share index.

The select lists from AXA Self Investor and Hargreaves Lansdown include passive funds too. These are also known as tracker funds, because they aim to replicate performance of a stock market index rather than to beat it. They often have much lower costs than actively managed funds.

Charles Stanley Direct’s fund list includes investment trusts too. Investment trusts are ‘closed-end’ fund that are traded like company shares on the London Stock Exchange. They are actively managed and have a fixed number of shares that investors can buy or sell.

*A member of Moneywise’s First 50 Funds for beginners.

Interactive Investor

Moneywise’s parent company Interactive Investor is a DIY investment platform. It offers fund recommendations to its customers by offering them a digital copy of Moneywise’s sister magazine Money Observer’s rated funds list. You can view this at www.moneyobserver.com/rated-funds-2017. Stewart Investors Asia Pacific Leaders is a member of the Money Observer rated funds.

Published: 10 February 2017
Last updated: 10 February 2017

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Seven most recommended funds from 10 investment platforms
I am unable to download the table in the above article. Can you please send me a link that will open.
Many thanks.
Jack Marshall