Eight funds to diversify your ISA portfolio

Staci West 13/03/2024 in Equities

When it comes to our investments, the allure of opting for the most popular choices, be it the largest, most renowned fund or the latest social media ‘tip,’ is often strong. Nevertheless, it’s important to explore a diverse range of options, steering away from a singular investment strategy. Diversification, after all, is key.

The inclination to follow with the crowd, driven by either a fear of missing out or a desire for the security found in conformity, is a common sentiment. Yet, investors who exclusively favour larger funds over smaller, early-stage counterparts may overlook the potential for significant outperformance offered by the latter.

It can also be rewarding to unearth some hidden gems – investments overlooked by other people. Here, we highlight eight pint-sized picks for your ISA this year – Elite Radar funds with less than £100m assets under management, which could be ideal for the satellite portion of your portfolio.

1. IFSL Marlborough Global Innovation

Rebranded in October 2020 when manager Guy Feld took over, is a concentrated portfolio of fast-growing, innovative companies. With £44.8m assets under management*, the fund invests in innovative disruptive companies from any sector – although has a heavy overweight to technology which currently makes up half the portfolio*.

2. Jupiter European Smaller Companies

This interesting fund was launched in February 2020 and holds £14m assets under management**. The fund’s process is solid, and the team is small and nimble. Manager, Mark Heslop is an experienced specialist in European smaller companies and has consistently delivered for investors in the past.

3. WS Montanaro Better World

This is a £92.9m* global equities fund investing in companies whose products or services are making a positive impact on the world. The fund will follow the Montanaro approach of finding overlooked, small and medium-sized companies whose quality and growth potential has been under-appreciated by the wider market.

Read more about the cross section of global equities, sustainability and Elite Radar funds.

4. Schroder Digital Infrastructure

A specialist fund launched over a decade ago, the fund seeks to take advantage of the ever-increasing demand for digital infrastructure. With £20.7m assets under management* and led by a highly experienced team, it’s hard to argue against the logic of this fund. Our demand for data is insatiable and this will require ever more digital infrastructure.

5. WS Amati Strategic Metals

A unique diversifier for investors, this £53.9m* fund invests in mining companies listed in developed markets worldwide. These are metals that have strategic importance to the global economy and future macroeconomic trends, which include amongst others, gold, copper, nickel, silver, and lithium. The largest positions in the fund are currently gold and silver at 31.7%* and 26.5%* respectively.

6. VT Tyndall Unconstrained UK Income 

Sitting in the UK equity income sector, this £24.6m fund* is a high conviction, highly differentiated mid-cap focused UK income fund. Simon Murphy is a very experienced manager and this fund offers something different with its combination of premium yield and dividend growth stocks. The fund has a historic yield of 4.16%*.

Listen to a recent interview with manager Simon Murphy on the Investing on the go podcast. 

7. VT Downing Unique Opportunities

Launched in 2020, this is a multi-cap UK equity fund run by the highly-experienced Rosemary Banyard. With a total £37.9m assets under management*** Rosemary looks for companies that have a sustained competitive advantage, with low debt and good management teams. The final portfolio will be highly concentrated at 25-40 names.

8. Artemis Leading Consumer Brands

Recently launched in December 2023, the baby of the group, this fund has just £10.3m assets under management*. This is a flexible global thematic fund that seeks to capture the emerging middle class’s consumption of luxury brands alongside the generational shifts in consumer habits.

*Source: fund factsheet, 31 January 2024

**Source: fund factsheet, 31 December 2023

***Source: fund factsheet, 29 February 2024

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.