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Hot funds: five wealth managers' top ISA picks

From Europe to India, our readers offer their fund and trust picks for this years' ISA season.

James Clark

Senior fund analyst, Hawksmoor Investment Management, Exeter

BMO Responsible Global Equity  

My top fund pick for this ISA season is BMO Responsible Global Equity.

Within our Sustainable World service we have a number of good sustainable global equity funds available to us, but I’ve picked Nick Henderson and Jamie Jenkins’ fund in this instance for its consistency of performance – it hasn’t lagged its IA Global sector average in a full calendar year since 2006. This consistency of performance relative to mainstream fund peers is remarkable.

The managers put this down to the structural tailwinds enjoyed by companies making a positive contribution to the environment and/or society.

I would also say that the portfolio’s quality bias has generally helped over recent years. With a comprehensive screening process covering both product-based and conduct-based criteria and a solid process, BMO Responsible Global Equity is a core holding amongst sustainable global equity funds. 

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James Clark

Senior fund analyst, Hawksmoor Investment Management, Exeter

BMO Responsible Global Equity  

My top fund pick for this ISA season is BMO Responsible Global Equity.

Within our Sustainable World service we have a number of good sustainable global equity funds available to us, but I’ve picked Nick Henderson and Jamie Jenkins’ fund in this instance for its consistency of performance – it hasn’t lagged its IA Global sector average in a full calendar year since 2006. This consistency of performance relative to mainstream fund peers is remarkable.

The managers put this down to the structural tailwinds enjoyed by companies making a positive contribution to the environment and/or society.

I would also say that the portfolio’s quality bias has generally helped over recent years. With a comprehensive screening process covering both product-based and conduct-based criteria and a solid process, BMO Responsible Global Equity is a core holding amongst sustainable global equity funds. 

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Andrew Rees

Investment manager, EQ Investors, London

Ashoka India Equity investment trust

One of my top picks for ISA season is the Ashoka India Equity investment trust, managed by Prashant Khemka.

The trust invests in the highest quality companies listed in India, with an investment process that focuses on companies that have cash flow sustainability and excellent corporate governance.

The result is a concentrated portfolio of mainly small and mid-cap companies. In addition there is an annual redemption facility at NAV which helps manage the level of discount.

We are strong believers in the long-term case for Indian equities. We see the main growth driver being domestic consumption, which is strongly supported by large scale government reforms to tax policy and the financial system.

India has strong property rights and an independent central bank, electoral commission and judiciary. We believe this should give investors confidence that the right building blocks are in place to benefit from the economic evolution that could drive future stock market returns.

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Ryan Hughes, 

Head of active portfolios, AJ Bell, London 

Newton Global Income 

This ISA season investors are faced with an uncertain political backdrop and we know that if there is one thing that markets don’t like it is uncertainty. 

So for investors looking to take advantage of their ISA allowance before they lose it at the end of the tax year, I’d be looking at a fund with a proven and repeatable investment process that can also benefit from regular dividend payments.

The Newton Global Income fund has a simple approach that looks at large companies that offer a dividend yield of 25% greater than the FTSE World Index.

Focusing on high quality, cash generative companies tends to offer defensive characteristics when markets become volatile but importantly the strategy over time looks to deliver steady long term returns underpinned by the dividend yield.

The fund is tried and tested with a very experienced manager in Nick Clay, which makes this fund a solid core for a balanced investor.”

 

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Patrick Thomas

Investment manager, Canaccord Genuity Wealth Management, London

Sarasin Food & Agriculture Opportunities fund

Global diet change is driving significant growth in the value of the food and agricultural market, and we see this as an interesting structural theme to differentiate portfolios. 

A rapidly growing number of middle-class consumers are demanding a richer and more varied diet and increasing food volumes must be met through increasing the efficiency of agricultural production, reducing waste and improving access to food.

As the food economy expands, significant opportunities also arise from the increased value-add in food processing and food services.

There are opportunities for investment across the full global food and agricultural value chain, from improving the productivity of emerging market farmland and agricultural inputs, through storage, infrastructure and technology, to the processing, branding and retailing of food. 

There are relatively few funds doing this, and this has been the standout performer over one, three and five years. Sustainable food production is crucial in the objective of meeting the UN's Sustainable Development Goals, and we see this fund embodying an important and profitable theme.'

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Cormac Nevin 

Investment analyst, Beaufort Investment, Redhill 

Waverton European Capital Growth 

A current favourite of ours is Waverton’s European Capital Growth fund.

The team hunts for companies with robust business models within the Europe Ex-UK equity universe, where companies can often be run inefficiently; generating low returns on capital.

The fund has strongly outperformed the wider market over the past five years and has done so generating less risk than the market. The ability to outperform the market with a more impressive Sharpe ratio is rare amongst European Equity managers.

The team invests in companies with five key attributes: Aligned management interests, earnings visibility, pricing power (often referred to as a “moat”), firms that are cash generative and generate a high return on capital.

This gives the fund a “Quality” bias, which has been shown empirically to outperform in the latter stages of an economic expansion as well as an outright recession. An excellent reason to hold the Fund in the current macroeconomic environment.

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