Four core holdings for a new portfolio

Staci West 24/03/2021 in Equities, Income investing

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

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.