If you prefer to invest in actively managed funds, as opposed to picking stocks yourself, you have no shortage of options these days. On platforms such as Hargreaves Lansdown, there are literally hundreds of funds to choose from.
That said, it’s important to do your research when choosing a fund for your portfolio. Some funds have performed far better than others (and let’s not talk about the Neil Woodford debacle). With that in mind, here’s a look at six funds I’d be happy to invest in for 2020 and beyond.
If you’re looking for a UK equity fund that has the potential to deliver a nice mix of capital gains and income, take a look at the TB Evenlode Income fund. What I like about this particular fund is that the portfolio managers focus on high-quality UK businesses. Top holdings currently include the likes of Unilever, Relx, and Sage. The performance of this fund has been excellent in recent years – over one year, it’s delivered a return of about 26% while over five years, it’s returned over 80%. Fees through Hargreaves are 0.9% per year (plus platform fees).
Another investment fund I like in the UK equities space is the Franklin UK Rising Dividends fund. Like the Evenlode fund, this fund has the potential to deliver both capital gains and income. Top holdings currently include Unilever, Shell, and Diageo. Performance here has been very good for a dividend-focused fund – over one year the fund is up about 25% while over five it’s up approximately 58%. Fees are low through Hargreaves at just 0.55% per year.
Finally, if you’re more of a growth investor, you might be interested in the CFP SDL UK Buffettology fund. This is a top-performing fund that, as its name suggests, invests with a Warren Buffett-like approach. It also has quite a strong focus on smaller high-growth companies. Top holdings currently include Games Workshop, AB Dynamics, and Dart Group. Over the last year, this fund has returned about 27% while over five, it has returned an excellent 127%. Fees are 1.19% per year through Hargreaves.
For exposure to global equities, it’s hard to look past the Fundsmith Equity fund. Between its inception in late 2010 and the end of November this year, Fundsmith delivered a return of 363%, outperforming its benchmark by a huge margin. Top holdings here include the likes of Microsoft, PayPal, and Facebook, meaning you’re getting exposure to some exciting high-growth companies. Just be aware that Fundsmith is quite concentrated, which adds risk. Fees are 0.95% per year through Hargreaves.
Another top option for global equities is the Lindsell Train Global Equity fund. Like Fundsmith, this fund has delivered fantastic returns over the years (five-year return of around 150%) but is also quite concentrated. Top holdings here include Unilever, Diageo, and Heineken and fees are a very reasonable 0.55% per year through Hargreaves.
Finally, check out the relatively new global equity fund Blue Whale Growth. Since its launch in September 2017, it has performed exceptionally well, delivering a gain of 43% to the end of November versus 19% for the Investment Association’s global sector average (placing it second out of 284 funds). Top holdings include Microsoft, Adobe, and Autodesk, and fees are 0.89% per year through Hargreaves.
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Edward Sheldon owns shares in Hargreaves Lansdown, Unilever, Diageo, Royal Dutch Shell, Sage, and Microsoft and has positions in the Fundsmith Equity fund, Lindsell Train Global Equity fund, the Franklin UK Rising Dividends fund, the Blue Whale Growth fund, and the Lindsell Train Global Equity fund. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool UK owns shares of and has recommended Facebook, Microsoft, PayPal Holdings, and Unilever. The Motley Fool UK has recommended AB Dynamics, Diageo, Hargreaves Lansdown, RELX, and Sage Group and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2020 $97 calls on PayPal Holdings, and short January 2021 $115 calls on Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.