Valentine’s Day: Funds our clients love – and we love too
- We look at the top funds (by net buy) loved by our clients and analysts – delving into the best buy lists of the last year, and choosing those which our analysts believe have the potential to deliver income and growth for investors over the long term.
- We also share the stocks that could benefit from Valentine’s Day celebrations.
Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown:
“Artemis Global Income was among the best bought funds in January – and one of our top picks for global income. This fund has proved popular in recent weeks as clients looked to diversify their portfolios away from the growth-style funds which have dominated over the past two years. Manager Jacob de Tusch-Lec has more of a value-bias, and less invested in the US than many other global equity funds, though it still makes up a good chunk of the portfolio. This is a good fund to hold alongside a global equity tracker, which will naturally have a bias to tech and consumer stocks, or as an alternative source of income to the UK market.
Another global fund, ASI Global Smaller Companies, hit the top 10 most bought in 2021, providing investors with a double dose of diversification, by investing both across the globe and in smaller companies that are overlooked by many other investors, including some from higher-risk emerging markets. It can be more volatile than those funds invested in larger companies, but its long-term performance has been strong since it launched in January 2012. It’s achieved this by broadly matching rising markets, but holding up much better during market falls. It is run by a talented team, including smaller companies guru Harry Nimmo and up-and-coming star Kirsty Desson.
Troy Trojan is a mainstay in the best buy tables, and it is easy to see why – a great pick for those investors who value capital preservation over volatile returns. This multi-asset fund invests in a mix of equities, bonds, cash and gold, and is a good core holding within a portfolio, providing ballast. Even the equities within the portfolio are chosen for their reliability – quality names with predictable cashflows. Turning to closed-end funds, our analysts and investors alike favour City Of London Investment Trust. An Association of Investment Companies “Dividend Hero”, this UK equities trust has increased its dividend for 55 consecutive years. While performance has been impacted in recent years by Brexit and coronavirus headwinds, it has delivered on its income mandate and investors clearly value this consistency. Manager Job Curtis is an income stock picking veteran, and has experience of delivering for investors through the market cycle.
Another income pick popular with HL clients and our analysts is Merchants Trust. This one has more of a value-style tilt. Long-standing manager Simon Gergel invests across the market scale; from the largest firms in the UK, down to smaller companies the rest of the market has overlooked. Gergel’s experience goes back decades, focusing on both income-paying assets and UK stocks. The trust typically yields higher than the wider market. As it has a value-bias, it could work well among trusts invested for growth, for style diversification or those which invest in global stocks for geographical diversification.”
|Top funds by net buy (£) (January, alphabetical)||Top investment trusts by net buy (£) (January, alphabetical)|
|Artemis Global Income||Bankers Investment Trust plc Ordinary 2.5p shares|
|Invesco UK Opportunities||Capital Gearing Trust plc Ordinary 25p Shares|
|JPMorgan Natural Resources||City Of London Investment Trust Ordinary 25p Shares|
|LF Blue Whale Growth||JPMorgan Global Growth & Income plc Ordinary 5p|
|Pyrford Global Total Return||Law Debenture Corporation plc Ordinary 5p|
|Schroder Income||Merchants Trust plc Ordinary 25p|
|Schroder Managed Balanced||Mid Wynd International Investment Trust Plc ORD GBP0.05|
|Stewart Inv Indian Subcontinent Sustainability||Riverstone Energy Ltd Redeemable Ordinary NPV|
|TB Guinness Global Energy||Ruffer Investment Co Ltd Red Ptg Preference Shares|
|Troy Trojan (Class X)||Temple Bar Investment Trust plc Ordinary 25p Shares|
|Top funds by net buy (£) (2021, alphabetical)||Top investment trusts by net buy (£) (2021, alphabetical)|
|ASI Global Smaller Companies||BlackRock Throgmorton Trust plc Ordinary 5p Shares|
|Baillie Gifford American||Capital Gearing Trust plc Ordinary 25p Shares|
|Baillie Gifford Managed||City Of London Investment Trust Ordinary 25p Shares|
|Baillie Gifford Positive Change||Harbourvest Global Private Equity Ordinary Shares|
|Fundsmith Equity||HG Capital Trust plc ORD GBP0.025|
|LF Blue Whale Growth||Monks Investment Trust plc Ordinary 5p|
|Marlborough UK Micro-Cap Growth||Pacific Horizon Investment Trust plc Ordinary 10p Shares|
|Rathbone Global Opportunities||Personal Assets Trust plc GBP12.50 Ordinary Shares|
|Schroder Managed Balanced||Ruffer Investment Co Ltd Red Ptg Preference Shares|
|Troy Trojan (Class X)||Smithson Investment Trust Plc ORD GBP0.01|
Stocks that could benefit from Valentine’s Day celebrations
Laura Hoy, Equity Analyst, Hargreaves Lansdown:
“As budgets are stretched thin by inflationary pressure, many couples may pare down their Valentine’s celebrations this year. If the pandemic’s taught us anything, it’s how to spice up a quiet night in and cash-strapped romantics may put those skills to use this year.
M&S could be a beneficiary here, with upscale food offerings that feel special but cost less than restaurant fare. With the group’s scaled-back Clothing and Home divisions giving the limelight to food sales, this would be a welcome tailwind for the retail giant, particularly as rising costs threaten to sway everyday shoppers toward lower-cost competitors. The group’s done an impressive about-face in the wake of the pandemic and investors are starting to get excited. However a key part of the transformation rests on maintaining improved grocery sales that stuck around post-lockdown, so Marks is likely hoping to be present at more than a few candlelit dinners.
While some may skip lavish gifts this year due to rising prices, the super-rich are unlikely to tone down their affections. Splashing out on champagne, perfume and luxury handbags should help luxury retail giant LVMH. It’s also a popular day to pop the question, which would add steam to Tiffany’s sales and further justify LVMH’s decision to stretch the balance sheet and buy the jewellery giant.
Lavish or cosy, Durex-maker Reckitt Benckiser will be hopeful love is in the air. The more health-conscious public will be hesitant to cosy up to anyone with the sniffles and being that this is the first winter in a long time we’ve been exposed to each other’s germs, it could bode well for its health-related brands like Mucinex and Strepsils. Over the counter medicine sales were already up 20% heading into the winter, but now that we’re well and truly into flu season that could continue to climb.”