It’s been a fairly shaky start to the year for investors. But those of you investing in a Foolish style (with a capital F!) won’t be too bothered by the latest short-term movements. If you’re looking to the future and building wealth for the years ahead, investment funds can play an important part in your plans.
So, to give you some inspiration, I’m going to share five exciting funds to keep an on this year, along with some general investing tips to help you on your journey to financial freedom.
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Which investment funds should you keep an eye on in 2022?
The experts over at Hargreaves Lansdown have compiled a list of their five top investment funds to watch out for in 2022. Let’s take a look at their picks.
1. Pyrford Global Total Return
Inflation has been a major buzzword lately, both in our lives and in the world of finance. When inflation figures are high, it can have a significant impact on investment returns and the ability of companies to grow.
This total return fund contains a mix of shares, bonds, commodities and currencies. The aim of putting such a diverse selection of assets into the fund is that the overall return will outpace inflation. This fund aims to:
- Not lose money over a 12-month period
- Deliver inflation-beating returns over the long-term
- Perform with low volatility
2. Artemis Global Income
Investment dividends are making a return. After a tough period during the coronavirus pandemic when many companies were forced to suspend or cut payments, shareholder rewards are back.
Global equity income investment funds like this invest in firms around the world, with the aim of paying investors a rising level of income. The fund managers often try to dive deep into the world of value investing to pick up shares neglected or out of favour with investors.
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3. Trojan Ethical Income
Investment funds with a focus on rewarding you with income in the form of dividends are a popular choice right now. As the name suggests, Trojan Ethical Income also avoids companies and industries deemed unethical.
A majority of this fund, around 70%, is invested in UK companies. And the remaining 30% is deployed overseas. But this allocation is only used if the managers can’t find enough attractive and ethical opportunities in the UK.
This fund provides a decent level of diversification whilst also ticking boxes for socially responsible investors.
4. Legal & General Future World ESG Developed Index
This fund falls into the ESG investing category. It invests globally across stock markets in developed countries.
You can think of it as an ethical index fund. It tracks around 1,300 companies, although the bulk of the investment, around 63%, is in the US. The main areas of focus are tech, pharma and financials.
5. JPMorgan Emerging Markets
Many firms in emerging markets have had a really tough time throughout the pandemic. This pain wasn’t helped by China’s big tech crackdown or the bubbling Evergrande debt crisis.
However, emerging markets can provide some attractive long-term opportunities for investors who aren’t in a hurry. These areas are projected to see lots of growth over the coming years. And this fund is in a good position to take advantage.
The fund has a sensible investing strategy, but emerging markets can be a bit spicy and unpredictable. So, this could be a good adventurous option to pair alongside some more stable investments.
How do you use investment funds like these?
You don’t have to just pick a single fund to invest in. You can select a few with different goals to build yourself a diversified portfolio. Investment funds can act as a good backbone you can then add individual stocks and shares to. If you need an investing refresher, check out our complete guide to share dealing.
How you organise things will depend on your investing strategy. But whatever you decide, it’s important you have a share dealing account that gives you access to a large choice of investments. Ideally, use a brokerage platform with low fees because this will allow you a better chance of building wealth over the long term.
With the end of the tax year fast approaching, it’s also worth making sure you’re making the most of an account like the Hargreaves Lansdown Stocks and Shares ISA. Such a move can help further reduce your overall costs. Just remember that investing carries risk and you may get out less than you put in.
