Four core holdings for a new portfolio

Spring has officially arrived. I’ve added fresh flowers to my window boxes, marked my calendar for Daylight Savings and am enjoying lunches in the garden once again.

I love Spring. It brings with it so many new possibilities and fresh starts. As Leo Tolstoy famously wrote in Anna Karenina, ‘Spring is the time of plans and projects’. And he’s right, I have a spring to-do list a mile long, including a very romantic date night to check in with our finances.

If you’re not already taking advantage of investing in an ISA, now is a good time to start. There’s still a week or so of the tax year left and an annual allowance to make the most of. Building a portfolio can be tricky. But the good news is it doesn’t need to be done in an instant and it can be a project that you can tend to over time.

“If people did not love one another, I really don’t see what use there would be in having any spring.” — Victor Hugo, Les Miserables

It’s important to note that the number of funds which should be held within a portfolio will vary depending upon the amount invested. If you’re making your first investment or have a modest amount to start out with, you may only have one to three core holdings.

What are ‘core’ holdings?

Core holdings form the basis of your investments. They are the foundations from which your portfolio can grow. There are no hard and fast rules about what this ‘core’ should be, but generally it’s the largest and most stable part of our savings – the strong roots, holding it all together. Some people may choose a multi-asset fund as their core, as they offer some instant diversification. I explained more about the different types in this video:

Other people may decide to opt for a core equity fund.

Four core equity fund ideas for your ISA

Fidelity Global Special Situations – Manager Jeremy Podger has been running funds since 1987 and has an excellent track record of adding value. This fund is a blend of different styles and is made up of Jeremy’s best ideas from around the globe including household names Apple, Microsoft and Sony*.

Invesco Global Focus – Another global equity fund, this is a more concentrated portfolio with a very simple philosophy: the manager looks to identify long-term persistent trends which are changing the world and then invest in the best companies in those areas. Current themes include e-commerce, digital payments, cloud computing and network security software.

Liontrust Special Situations – This fund invests in UK companies of all shapes and sizes. The managers have a distinct investment process, focusing on companies with hidden, intangible strengths that competitors struggle to reproduce – like intellectual property, strong distribution networks and recurring revenues.

JPM US Equity Income – For those wanting to invest in the world’s largest economy, this fund invests in a broad range of US companies. The managers look for undervalued businesses that exhibit durable franchises and strong management teams. Established stocks with above-average yields help ensure a stable income too.

*Source: fund factsheet, 28 February 2021