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We examine the best performing funds from AJ Bell Youinvest’s list of favourites
Thursday 03 Aug 2017 Author: David Stevenson

Like a number of investment platforms AJ Bell Youinvest offers a list of ‘favourite funds’ to help you narrow down your selections from the thousands of options available to you. There are 72 active and passive funds to choose from, all selected with the help of investment consultant Square Mile, for this article we’re focusing on funds that have returned more than 20% to investors, all but one over a three-year period.

FUNDS - Polar Capital Global Technologies

As the name suggests, this fund looks to capitalise on the growing value of technology equities. Its aim is to beat its benchmark, the Dow Jones World Technology index, by 3% to 7% a year.

According to Square Mile, lead manager Nick Evans supported by his team visit 800 companies each year as well as industry events to keep up with developments.

The fund’s portfolio is made up of between 70 and 90 stocks. While the idea is for a single holding to make no more than 3% of the fund, it has 8% of the fund in mega cap Alphabet.

But the fund is really looking to those smaller companies which may be the next generation of tech leaders. Jake Moeller, head research for the UK and Ireland at Thomson Reuters’ Lipper, says ‘Polar has managed to outshine competitors in a tough market for tech funds. It takes on a bit more risk in smaller cap stocks to do so but has converted its bets well.’

 

FUNDS - Jupiter Asian Income

This fund is the odd one out from the selection as it offers a healthy yield of 3.72% as well stellar growth opportunities. Run by Jason Pidcock, who Moeller describes as an ‘industry veteran’, at Jupiter he is free to use his own investment philosophy, unconstrained by house styles seen at other firms. He has over 20 years of experience investing in Asian stocks.

The fund is new, launching in early 2016 and has already returned 26%.

Square Mile says Pidcock ‘likes growing companies where he can understand their business models and which in his view are both sustainable and scalable’.

The portfolio of between 40 and 50 holdings will contain those with higher yielding dividends than the market as well as those with good growth prospects.

 

FUNDS - Artemis US Smaller Companies

This fund offers investors exposure to smaller US companies with a market cap between $1bn and $10bn. Square Mile says that although this fund doesn’t have a long track record, starting in 2014, ‘we are comforted by our belief that [fund manager] Mr Weldon is an accomplished investor who built a highly credible track record at Threadneedle Asset Management where he ran a similar product.

Lipper’s Moeller says ‘the US economy is well placed to support smaller companies and this fund should provide good opportunities for investors with a decent risk budget’. The fund aims for diversification and contains between 50 and 70 holdings with a rule that for every unit of downside risk, a stock should have at least twice the upside potential.

 

FUNDS - Polar Capital Global Insurance

Fund manager Nick Martin’s aim with this fund is to invest in quality insurers that can produce sustainable underwriting profits. These companies tend to have management teams that are underwriting with their own money through material stock ownership.

 

FUNDS - Standard Life Investments Global Smaller Companies

This fund looks for companies that have the potential to be future leaders in their field. Square Mile views that manager Alan Rowsell ‘has a very good understanding of his asset class and shows a deep commitment to the fund’s investment philosophy and process’.

 

FUNDS - Baring Europe Select Trust

This fund’s team of managers, Colin Riddles, Rosie Simmonds and Nicholas Williams, look for companies with growth potential and reasonable market valuations.

The fund limits the market cap of companies it can invest in to €5bn.

 

FUNDS - Old Mutual UK Smaller Companies

Managed by small cap veteran Dan Nickols, his team has a growth bias but also take a macro view which can guide them to more cyclical or defensive companies when appropriate.

The fund’s objective is to outperform the Numis Smaller Companies (ex Investment Trust) benchmark.

 

FUNDS - Invesco Perpetual Asian

According to Square Mile, the team, led by manager Wiliam Kam, believes that investors behavioural biases can give rise to market inefficiencies, such as overreactions to short-term news.

The previous lead manager Stuart Parks now heads the Asian equity team at the firm.

 

FUNDS - Baillie Gifford Japanese

According to Square Mile, this fund is managed by a highly regarded team with a long established record of investing in Japanese equities. One distinguishing feature of this fund is the longer time horizon used by the management team consisting of Matthew Brett and Sarah Whirley.

Source for all data AJ Bell Youinvest

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