- BestInvest has published its annual Best Fund Picks
- The list of 119 investment options includes traditional funds, trusts and ETFs
- The platform has removed 10 funds from last year’s list and added 11 new ones, including five ETFs.
The idea of withdrawing from one of the thousands of funds offered at any one time is daunting for the average investor.
And with new funds launching every month, it’s easy to pick big names and rely on past performance alone.
Twice a year investment platform Bestinvest publishes its best fund list That includes traditional open-ended funds — known as OIECs — investment trusts and ETFs.
The 119-strong list includes funds managed by large, well-known fund management groups, but also includes a selection of smaller, boutique management groups that are not household names.
BestInvest has published its annual best buy list, which picks funds it thinks will outperform its peers and benchmarks.
There are 11 new funds this year with a greater focus on passive options — trackers that simply clone an index, with no manager actively making decisions — and sustainable investments.
Top funds include Brown Advisory Global Leaders, investment trust Renewables Infrastructure Group, and five ETFs.
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Some of the funds included in last year’s list have not been made this time. These include Civitas Social Housing, HSBC’s FTSE 250 Index and LionTrust Special Situations Fund.
How is the fund selected?
The BestInvest list highlights funds that the firm feels can outperform their peers and benchmark indexes.
What are the best buy lists?
Best buy lists took a coveted hit in 2019 following the Woodford scandal. The major Woodford fund was listed on various buy lists several times over the years, and remained on Hargreaves Lansdowne’s ‘Wealth’ list until trading was suspended.
Best buy lists are not regulated as financial advice, so investors should be aware that they are just recommendations.
It can be helpful to look at as many different lists for fund ideas as possible and those that crop up frequently can be seen as funds that have impressed analysts.
For example, LionTrust UK Growth is included on both BestInvest and Hargreaves Lansdowne’s best buy lists, while AJ Bell and Interactive Investor’s lists feature its special status funds.
BestInvest says it has ‘scored each sector to choose the funds we think are able to outperform their peers and benchmarks’.
It continues: ‘Of course we can’t guarantee that. We’re not saying they’re definitely the ‘best’ – and we’re not saying they’re right for you – but what we are saying is that we have genuine faith in them.’
The investment platform says, ‘We’re not saying they’re definitely the “best” – and we’re not saying they’re right for you – but what we are saying is that we need to get real in them. believe.”
Criteria when selecting actively managed funds – the firm’s ’10 commandments’ – include managers who are not constrained by embracing benchmarks, have a clearly defined approach, investing in their own funds individually. and are prepared to limit the size of their funds if it starts to hinder the way they are managed.
The problem with relying on past performance alone is that a fund’s past performance may be on top of what it is today, achieved under a different manager, or successful under a very different set of circumstances, which may in years to come. may be less relevant. ,’ says Jason Hollands, managing director of BestInvest.
“Choosing funds is not just a matter of doing some homework before buying them, it is important to continuously monitor your portfolio once you invest.
‘Change in circumstances, such as the departure of a fund manager or a significant increase in the size of the fund, is what many require to reassure you whether it is worth staying invested or moving to another fund instead.’
Investor appetite for UK growth companies grew in the first few months of 2021, before inflation fears dampened hopes of a recovery.
Those investing in growth companies were boosted by an increase in the dollar, along with strong performance among the health and consumer businesses. Despite this revival, UK valuations still look low compared to other markets.
There are still many challenges in the UK, from the consistently high Covid case rate to the initial troubles over Brexit. There will be opportunities, but choosing the right manager and fund is important,’ says Bestinvest.
- Artemis Corporate Bond Fund
- Artemis UK Select Fund
- Brown Advisory Global Leaders
- iShares Core MSCI Japan IMI ETF
- iShares FTSE 250 ETF
- iShares UK Property ETF
- Jupiter UK Specialist Equity Fund
- Renewable Infrastructure Group
- Royal London Sustainable Leaders Trust
- SPDR S&P 500 ETF
- Vanguard FTSE All-World UCITS ETF
- Allianz Strategic Bond
- Artemis US Absolute Returns
- AXA Global High Income
- AXA US Short Duration High Yield
- Citizen Social Housing Plc
- Greencoat UK Wind
- HSBC FTSE 250 Index
- Liontrust Special Status
- SPDR S&P US Dividend Aristocrats ETF
- Trojan Income Fund
Ben Whitmore is one such manager. The veteran fund manager runs Jupiter UK Special Solutions, which has a large-cap bias and a value-oriented approach. It is generally less volatile than the broader market and other price managers.
“Solid stockpicking, controlling for factor exposure within the portfolio, and opportunistic use of cash have added considerable value over time.” Investors looking to invest in this part of the market will benefit from Whitmore’s experience in consistently deploying their investment process in a risk-efficient manner,’ says BestInvest.
Leontrust UK Growth has also been selected as the UK’s top growth fund…