Making a mint: five funds for a royal wedding

Sam Slator 16/05/18 in Strategy

Royal weddings are spectacular affairs, filled as they are with tradition, glamour, pomp and circumstance. As Prince Harry and Meghan Markle prepare for their nuptials, we take the opportunity to suggest some investment alternatives to the traditional wedding rhyme:

Something old: City of London Investment Trust

“Something old represents continuity and protection for the baby to come. City of London was launched way back in 1891, when Queen Victoria was on the throne, Robert Gascoyne-Cecil, the third Marquess of Salisbury, was prime minister and Arthur Conan Doyle’s detective, Sherlock Holmes, appeared in the Strand Magazine for the first time. It is one of the longest-running investment trusts and invests predominantly in larger UK companies with international exposure. It has increased its dividend payment every year for the past 50 years.”

Something new: Baillie Gifford Shin Nippon

“Something new offers optimism for the future, so what better choice than Baillie Gifford Shin Nippon? Prime minister Abe’s economic reforms have been the source of new optimism for Japanese businesses, workers and investors so long used to a lacklustre economy and deflationary environment. ‘Shin Nippon’ means ‘new Japan’ and this trust focuses on emerging or disrupted sectors, where the manager sees innovative growth opportunities. The team are prepared to bide their time while these companies reach their full potential and, while the trust can be highly volatile, patient investors have been richly rewarded.”

Something borrowed: Jupiter Absolute Return

“Something borrowed symbolises borrowed happiness or good luck. Our investment pick, however, borrows stocks to make money when the share price falls. Jupiter Absolute Return is run by James Clunie – a short selling specialist, with a PhD in the subject. In very simple terms, he can borrow a stock he wants to bet against, sell it to an investor who disagrees, wait for the stock price to fall then buy the share back at a lower price and return it to the investor he borrowed it from in the first place. This takes skill and lot of it. You can’t rely on luck alone.”

Something blue: BlackRock Continental European Income

“Something blue’ stands for purity, love and fidelity. BlackRock Continental European Income invests in European blue-chip companies with market capitalisations in excess of £1 billion. This translates into an investment universe of approximately 300 to 350 stocks that are researched in detail. The co-managers’ active investment skills have been the key to this fund delivering reliable, growing income without sacrificing long-term capital appreciation. It has a current yield of 3.93%.”

A sixpence in her shoe: Investec Cautious Managed

“And finally, the sometimes forgotten end to the rhyme is ‘a sixpence in her shoe’, which is a wish for good fortune and prosperity. While the Royal Mint designs special coins to commemorate Royal weddings, our choice is Investec Cautious Managed. This multi-asset fund is managed by Alastair Mundy, with a distinctive contrarian investment process. The equity portion of the portfolio provides the long-term growth while other assets are used to reduce volatility. It currently has 9.1% in physical gold and silver and 3.7% in precious metal shares.”

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views of the author and any people interviewed are their own and do not constitute financial advice.