Investment funds to globalise your new ISA

11th August 2014


The beefed-up £15,000 new Isa (NISA) threshold is now with us. And while the summer holidays are here, investors venturing overseas for a break may want to take the time to think about making the most of the new investment limit and even consider taking their savings global.

Tom Stevenson, investment director of Fidelity Personal Investing, comments: “When deciding on the right place for your ISA investments, it’s important to diversify your savings across different assets and global regions. Recent political turmoil in the Ukraine is proof that the world is an unpredictable place – in uncertain markets it’s dangerous to leave all your eggs in one basket by investing solely in one geographical region. However much you may like the look of a particular country, resist the urge to plough all of your money into one place, and instead spread your risk as far as you can.”

Fidelity Personal Investing highlights some top funds which savers could include…

USA – Smith & Williamson North American Trust

Robert Boyle is the lead manager of this fund, having been appointed director and co-manager in July 2012, and subsequently lead manager in September 2013. Boyle and his team aim to invest in effectively managed, quality companies, with stock price a key consideration. As part of their investment process they carefully evaluate the quality of the business, as well as its management. Once the investment team is satisfied that the business is sustainable and that company management is shareholder-friendly, the team calculate and study valuation metrics to establish a ‘suitable’ price.

JAPAN – Baillie Gifford Japanese Equity

The fund is co-managed by Sarah Whitley and Matthew Brett. Whitley and Brett believe that the Japanese market is particularly conducive to growth investing. With this in mind, they focus on analysing the fundamental features of companies, as well as looking at industry background and competitive position. Supported by their broader investment team, the managers conduct hundreds of company meetings each year, both in Japan and in Baillie Gifford’s Edinburgh office.

EUROPE (ex-UK) – BlackRock Continental European Fund

Vincent Devlin is first and foremost a stockpicker, though he maintains an awareness of broader economic themes. The BlackRock European team is led by Nigel Bolton who encourages rigorous debate and teamwork. The chief focus of the fund is on large companies and Devlin will vary his investment tilt depending on his bottom-up idea generation and top-down view.

Risk management is a critical aspect of the manager’s investment process and he relies heavily on BlackRock’s risk analytics.

ASIA (not including Japan) – Aberdeen Asia Pacific Equity Fund

This fund is managed by a team based in Singapore, benefiting from being able to call on colleagues based elsewhere in Asia. Members aim to select stocks likely to deliver the best long-term growth prospects in the region. The fund is fairly concentrated, with relatively little concern about country and sector weightings. Considerable efforts are devoted to ensuring that prospective investments have high-quality management and the best interests of shareholders at heart.

…or spread your risk globally in just one portfolio

OTHER EMERGING MARKETS – Fidelity Emerging Markets 

Nick Price aims to deliver long-term capital growth from a diversified and actively managed portfolio of securities. His fund offers investors material exposure to, and/or derives a considerable proportion of its earnings from companies in the developing economies of the world. While income from this fund is likely to be moderate, Price has a preference for those companies which distribute a dividend to their shareholders.

Rathbone Global Opportunities Fund   

Cornell-graduate James Thomson has managed the fund since 2003. His primary criterion is the health of any given company’s growth prospects. Thomson’s fund is largely made up of medium-sized companies. He favours companies with a clear, intelligible structure and which have capable management teams. He works in conjunction with Alexandra Jackson, who assists him in managing the fund.

Stevenson adds: “Global funds are a good way to gain instant exposure to a range of markets, without having to do as much homework. But just like any other type of fund, these operate in different ways, so check that the manager’s style suits your needs before you invest. Whether it’s global equity income, or pure equity, or global bonds you’re after, different funds work in different ways, and suit different risk appetites, so make sure you choose the one that’s right for you.”

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