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We asked some freelance writers to reveal the top investment funds in April.
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Baillie Gifford Japan Trust
What we do: Baillie Gifford Japan Trust focuses on achieving long-term capital growth primarily by investing in smaller to medium-sized Japanese companies.
By Mark Tovey. I plan to buy shares in it Baillie Gifford Japan Trust (LSE:BGFD). That’s because the Bank of Japan, after 20 years of keeping interest rates at zero, is expected to change direction as the new governor takes over in April. That should result in a strengthening of other currencies, giving Japanese consumers more purchasing power.
If it has started to return, it will increase by 16% this year above 2022.
Of course, if strong can throw cold water through the profit of some Japanese exporters, like Canon and Toyota.
But I’m not worried about that risk, because Japanese companies have increasingly outsourced production overseas over the past two decades. While 15% of manufacturers made their products abroad at the turn of the millennium, that number has now almost doubled to 25%.
In short, if it is possible to do so, it raises the Japanese consumers and producers who have outsourced operations.
Mark Tovey has no shares in Baillie Gifford Japan Trust, Toyota or Canon.
CT Europe Select
What it does: The CT European Select Fund invests in European stocks. The objective is to achieve above average capital growth.
By Edward Sheldon, CFA. Europe is home to some world class companies and I see that CT European Select Fund is a great way to gain exposure.
There are a few things I like about this particular fund. One is to focus on higher quality companies that have the potential to increase their profits steadily every year.
Another is a performance track record. Over the last five years, this fund has returned about 50%. It is a very respectable performance and the return is higher than the FTSE 100 has been born.
Finally, I like the fact that the fees are over Hargreaves Lansdowne only 0.65% per year. That’s pretty cheap for an actively managed fund.
One risk to be aware of is that these funds are relatively concentrated. This means that stock-specific risk is higher than average.
Overall, however, I think this fund has a lot of appeal.
Edward Sheldon has positions in CT European Select Fund and Hargreaves Lansdown.
iShares Gold Producers UCITS ETF
What it does: The iShares Gold Producers UCITS ETF gives investors exposure to a variety of gold mining companies.
By Royston Wild. Gold’s recent burst back above $2,000 per ounce suggests now could be a good time to gain exposure to the safe-haven metal. Further gains can be kept at this critical technical level, and macroeconomic and geopolitical uncertainty continues.
One way individuals can do this is by investing in iShares Gold Producers UCITS ETF (LSE:SPGP). This exchange-traded fund has more than $1.7bn locked up in around 60 gold mining companies.
The fund is heavily focused on Canadian-domiciled businesses, although it also has large holdings in Australian, US and South African miners. Some key holdings are included Barrick Gold, Newmont and Franco-Nevada.
The beauty of investing in these ETFs is that, unlike those that only track the price of gold, this particular investment vehicle pays dividends. This is then automatically reinvested into the fund at no additional cost.
Royston Wild has no positions in iShares Gold Producers UCITS ETF, Barrick Gold, Newmont or Franco-Nevada.
LF Blue Whale Growth Fund
What we do: LF Blue Whale Growth Fund invests in stocks that have the ability to grow and increase profits over the long term.
According to Paul Summers: ‘Growth’ is a dirty word these days. With interest rates still rising, many investors are focusing on the short term and buying stocks in more established (but not always good) companies. I am inclined to do the opposite.
At LF Blue Whale Growth Fund invests in a concentrated portfolio of high quality, blue-chip stocks that have solid futures. We’re talking about those worth over £100bn, not market traders.
According to the latest fact sheet, the fund has returned more than 10% annually since its launch in 2017. Although past performance is not a guide to the future (and fees should be taken into account), it is higher than the average of 7.9% achieved. through the same funds. It also follows a period of poor performance, possibly because almost half of the portfolio is invested in technology companies.
When sentiment reverses (and I’m sure it will), I want to be ready.
Paul Summers has a position in LF Blue Whale Growth Fund.
L&G Cyber Security ETF
What it does: The L&G Cyber Security ETF tracks stocks of companies active in the cyber security industry.
By Ben McPoland. Not a week goes by without another hacking incident. And it is likely to get worse, because cybercrime is expected to cost the world around $10.5trn per year by 2025. This means that cybersecurity is an absolute necessity for all companies, organizations and governments.
I think L&G Cyber Security ETF (LSE:ISPY) is an excellent vehicle to ride this long-term megatrend. This exchange-traded fund (ETF) of Legal & General containing 43 shares. The above ownership is Palo Alto Networks, Cloudflare and Fortinet.
Cybersecurity threats are changing as the technology hackers use is becoming more sophisticated. And artificial intelligence is up to the ante in this game of cat and mouse. This fund provides broad exposure to all industries.
I must note that it carries 0.69% active power, which is not as cheap as some ETFs. That said, I consider it a price to pay for capturing the growth potential of the cybersecurity sector. The fund is up 150% since its launch in 2015.
Ben McPoland owns shares in the L&G Cyber Security ETF and Legal & General.
Scottish Mortgage Investment Trust
What we do: Scottish Mortgage is a technology investment fund with global investments included Tencent, ASML, Ali Baba, Amazon and NIO.
According to John Fieldsend, I’m not usually the biggest fan of investment funds. The fee for managing the fund, sometimes as much as 2%, will really make any profit. So the first thing I like about it Mortgage Scotland (LSE: SMT) is down just 0.23%
The next thing is the star record. Between 1993 and 2020, the fund returned approximately 1,500% to investors. In comparison, the S&P 500 — which also contains many large tech companies — returned about 700% over the same period.
The icing on the cake for me is the nature of the fund portfolio. With around 30% in private equity and a large position in hard-to-research foreign-owned companies like Tencent or ASML, I feel that investing in Scottish Mortgage gives me exposure and diversification that I would otherwise not have had.
All of these reasons combined are why I took the plunge and picked up some stocks recently.
John Fieldsend owns shares in Scottish Mortgage.
Seraphim Space Investment Trust
What we do: Seraphim Space Investment Trust is the world’s first publicly listed fund focused on space technology.
By John Choong: Seraphim Space Investment Trust (LSE:SSIT) is a fund that invests in early stage companies focused on developing space technology. The investment was made with the aim of dominating the space technology market by becoming a market leader in industries such as climate, communication, mobility, and also cyber security.
Today, the launch market is seeing a supply deficit for the first time in decades. This is because there is an increase in use cases for satellites and other space-related technologies. So, with investments in companies such as Rocket Lab, Airbusand Blue Origin, Seraphim is one of the funds to expand the demand for space products.
Given that the trust is currently trading at a 60% discount to its IPO price, there’s no reason to argue that the stock is worth buying for investors today for its long-term potential. After all, the current stock price is 50% lower than the net asset value (NAV) per share.
John Choong has no position in any of the stocks mentioned.
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