National Sugar Cookie Day: A recipe to sweeten your portfolio

By Staci West on 9 July 2026 in Ideas & insights

National Sugar Cookie Day (9 July) probably isn’t one of the biggest dates in your calendar — although, I will take any excuse for a sweet treat! While a plain sugar cookie is perfectly fine, it’s really all the added extras that make it great. A drizzle of icing, a handful of sprinkles or a few chocolate chips, and suddenly you’re going back for seconds. Dare I say that investing is similar…

Every portfolio should start with strong foundations. Think of broad, diversified funds as your flour, butter and sugar – the ingredients you simply can’t do without. Once those are in place, however, adding a few carefully selected specialist funds can bring extra flavour, diversification and additional growth (or income) potential.

The important word here is carefully. Anyone who’s decorated sugar cookies knows there’s a fine line between “beautifully finished” and “I’ve accidentally emptied an entire jar of sprinkles onto one cookie.” The same applies to investing. A few complementary holdings can enhance a portfolio; too many can make it unnecessarily complicated.

So, in honour of National Sugar Cookie Day, here’s our recipe for adding a little sweetness to your portfolio.

A spoonful of patience – Ashoka India Equity Investment Trust

Every recipe benefits from an ingredient that rewards patience, and India could be exactly that. It’s been one of the few notable disappointments among equity markets so far in 2026, down around 7% year to date*. While Asia and emerging markets have surged thanks to excitement around artificial intelligence and the semiconductor supply chain, India has largely sat this rally out. Higher oil prices haven’t helped either, with India being a significant importer of energy. But that’s exactly why it’s worth another look.

The long-term investment case for India hasn’t disappeared. Far from it. The country continues to enjoy favourable demographics, a growing middle class and an expanding economy. Importantly, valuations have become much more attractive after a period when many investors questioned whether they had simply become too expensive.

That’s where the Ashoka India Equity Investment Trust stands out. Rather than simply buying the largest household names, the managers look across companies of all sizes, with particular expertise in the small and mid-cap space. Backed by an extensive local research team, they focus on businesses capable of delivering sustainable long-term growth while paying close attention to corporate governance.

A drizzle of Japan – Comgest Growth Japan

If someone asked you to name the world’s best-performing major stock market over the past couple of years, chances are you’d say the US. You’d be forgiven. You’d also be wrong.

Japan has quietly been outperforming, yet many investors still think of it as the market that spent decades going nowhere. Comgest Growth Japan looks to challenge exactly that perception. The fund invests in a concentrated portfolio of around 30 to 40 high-quality Japanese businesses, each selected with a three-to-five-year investment horizon.

The managers believe Japan remains one of the world’s most under-researched markets, filled with companies that possess strong competitive advantages, disciplined management teams and impressive long-term growth prospects. As manager Richard Kaye told us in a recent interview:  “The S&P has actually lagged the Japanese market for at least two years now. Everyone still assumes that the American market is the greatest place to invest… The Nikkei has surpassed the S&P for a number of years now.”

A pinch of Chinese innovation – FSSA All China

China rarely stays out of the headlines for long. Trade tensions, regulation, geopolitics and economic growth all tend to dominate the conversation. Yet beneath those headlines lies something much more interesting: innovation.

FSSA All China takes a genuinely long-term approach, investing across the entire Chinese market, including the often-overlooked domestic A-share market. Rather than chasing the latest trends, the team looks for high-quality businesses with strong management teams, good governance and sustainable competitive advantages.

As the managers put it: “China’s innovation story extends far beyond a narrow group of AI-related names.”

Although AI may be dominating investor attention in 2026, innovation is also happening across advanced manufacturing, healthcare, consumer businesses and renewable energy. The managers believe these broader opportunities are often overlooked, allowing patient investors to benefit over time**. They also see encouraging signs that the investment backdrop is improving, with better corporate governance, stronger shareholder protections and greater policy clarity helping to create a more stable environment for long-term investors.

A layer of resilience – JPM US Equity Income

Mention US investing and most people immediately picture the Magnificent Seven. But America’s stock market is far bigger than seven companies.

JPM US Equity Income offers exposure to around 100 established businesses, focusing on companies that pay attractive dividends while still offering long-term growth potential. It provides a different way to access the world’s largest stock market without relying solely on the biggest technology names.

After several years of market leadership becoming increasingly concentrated, 2026 has seen investors broaden their search for opportunities. The managers recently commented: “The US equity market remains cautious amid volatility and return dispersion… the rotation away from the largest technology names reinforces the case for active stock selection.”

For investors who still want exposure to the US but prefer a smoother ride – and a growing income stream along the way – this could be an appealing ingredient to add.

A sprinkle of financials – Janus Henderson Global Financials

Financial companies don’t usually get the same attention as technology stocks. They’re a bit like the vanilla extract in baking. Nobody talks about it very much, but leave it out and you’ll notice the difference.

Janus Henderson Global Financials invests across banks, insurers, exchanges and other financial services businesses around the world. Rather than simply buying the largest institutions, the managers focus on companies benefiting from long-term structural trends or favourable economic conditions.

Those conditions remain supportive. Interest rates are still well above the ultra-low levels investors became accustomed to over the previous decade, providing a healthier backdrop for many financial businesses. At the same time, the sector is undergoing significant technological change.

Manager John Jordan notes: “Growing adoption of AI presents both opportunities and risks to financial business models, and we are actively engaged in research and dialogue to identify potential winners and avoid potential losers.” He also sees opportunities emerging within European banks as regulation evolves and industry consolidation gathers pace.

A handful of innovation – WS Amati Global Innovation

Innovation investing doesn’t have to mean buying the biggest names everyone already owns. That’s exactly what makes WS Amati Global Innovation different. Rather than concentrating on the mega-cap technology giants that dominate global indices, the managers search for companies enabling innovation, adopting new technologies or quietly transforming their industries. Their portfolio spans semiconductors, aerospace, defence, healthcare and many other sectors. It’s deliberately different from a traditional global technology fund, making it an interesting complement to broader global equity holdings.

Despite concerns that parts of the market may be becoming overheated, the co-manager Mikhail Zverev remains optimistic: “Our prevailing feeling is we have more compelling ideas than we have spaces in the portfolio, and we are happy to hold positions even as they deliver strong performance.”

The finishing touch: WS Montanaro UK Income

Every good recipe deserves a finishing touch. For us, that’s UK smaller companies. The UK hasn’t captured many headlines during 2026. It hasn’t experienced the explosive technology-driven gains seen elsewhere, but beneath the surface there’s growing evidence that investors are beginning to rediscover the market.

WS Montanaro UK Income focuses on small and medium-sized UK businesses capable of paying attractive dividends while growing those payments over time. It’s a very different proposition from a traditional UK equity income fund. The managers believe valuations remain exceptionally attractive.

Manager Guido Dacie-Lombardo recently wrote: “Extreme negativity is being priced in for high-quality UK small-caps.” At the same time, M&A activity continues as overseas buyers take advantage of these depressed valuations. Encouragingly, UK equity funds have also experienced their first net inflows in five years, suggesting sentiment may slowly be improving.

If our recent mid-year review highlighted one opportunity that continues to stand out, it’s this one. UK smaller companies remain historically cheap despite many businesses continuing to deliver solid operational performance.

Sometimes the final dusting of icing sugar is exactly what brings everything together. Just try not to overdo the sprinkles.

*Source: FE Analytics, total returns in pounds sterling, 1 January 2026 to 30 June 2026
**Source: FSSA, 23 February 2026