Investors looking for this year’s hotshot fund managers in the hope of getting the best returns might want to keep a close watch on the following five, according to Fundcalibre.
The rating agency’s senior fund analyst, Tony Yousefian, has highlighted five managers he thinks investors should consider in 2018 – two of whom run Moneywise First 50 funds for beginner investors.
Matthew Brett – Baillie Gifford Japanese
Mr Yousefian believes Japan is one of the few equity markets with value left, seeing as it is still 40% off its long-term peak – the Japanaese Nikkei 225 index achieved its all-time intra-day high on 29 December 1989 of 38,957.44. In comparison, at the time of writing the index sits at 22,764.94.
He highlights Matthew Brett, who is set to take over Baillie Gifford’s Japan team in April when Sarah Whitley retires after 37 years, as being one to watch. Mr Brett will also take over Baillie Gifford Japan Trust.
With a strong reforming government under Prime Minister Shinzo Abe, Mr Yousefian says there “exciting opportunities to be had” in Japanese equity markets.
Investors looking for Japanese exposure could also consider Moneywise First 50 fund, Man GLG Japan CoreAlpha.
Alexander Darwall – Jupiter European
Fundcalibre has a positive view of European equities this year, having lagged behind the US and UK in their economic recovery, only showing signs of renewed strength in 2017.
For this reason, Alexander Darwall at Jupiter European looks set to be a good management choice, according to Mr Yousefian. Fundcalibre say that this fund was the second most viewed on its website last year, “not bad considering the asset class is unloved by UK investors,” says Mr Yousefian.
Mr Darwall also runs Moneywise First 50 Fund pick Jupiter European Opportunities Trust. Mr Darwall has proved to be an exceptional stock-picker in the past, and this trust invests in a focused portfolio of around 40 stocks and favours high-quality European businesses.
Henry Dixon – Man GLG UK Income
Mr Yousefian says Man GLG UK Income has a value-driven approach and has managed to “consistently outperform” in recent years, despite using an out of favour style.
Its manager, Mr Dixon, invests principally in UK companies, but also in European companies that derive substantial revenues in the UK. The fund can also invest up to 20% in corporate bonds, something that sets it apart from its peers. Since Mr Dixon took over in 2013, it has performed extremely well.
Investors looking for income from UK equities may also want to consider Moneywise First 50 Funds MI Chelverton UK Equity Income, which also won the UK equity income category in the Moneywise Fund Awards 2017, Evenlode Income, and LF Woodford Equity Income.
Stuart Steven – Liontrust Monthly Income Bond
This fund was launched in 2010 and has been invested mostly in short-dated bonds. This approach decreases sensitivity to interest rate rises. Mr Steven has managed to outperform and produce a good yield, currently 5.5%.
When interest rates begin to normalise further it has the flexibility to invest in longer dated bonds too. Mr Yousefian comments: “As monetary policy is reversed, it should come into its own.”
Neil Woodford – LF Woodford Equity Income
Mr Woodford has had a calamitous six months since he celebrated the third anniversary of his LF Woodford Equity Income fund – a Moneywise First 50 pick for beginner investors – in June. One of his top 10 holdings plummeted by 70%, while Mr Woodford has experienced other stock-specific issues recently.
For that reason, Mr Yousefian says: “All eyes will be on Mr Woodford in 2018 to see if he can turn things around. He’s very candid and thinks Brexit will have less of an impact on UK companies than some are saying, but also thinks that equity markets are in bubble territory.
“He’s made some big calls before and been proved right. We continue to back him.”