Six pint-sized picks for your ISA

Darius McDermott 01/03/2021 in Global, Equities

When it comes to our investments, it’s often tempting to pick the most popular option – the biggest or most well-known fund or, as has been the case recently, the latest ‘tip’ on social media.

Whether it’s because we have a fear of missing out or we just find reassurance in following the crowd, there is some comfort in doing what everyone else is doing.

But it can also be rewarding to unearth some hidden gems – investments overlooked by other people. Here, we highlight six pint-sized picks for your ISA this year – Elite Rated funds with less than £100m assets under management.

1. Legg Mason IF Martin Currie European Unconstrained

Although this fund launched almost six years ago and is a top quartile performer in its sector over one, three and five years*, this fund has just £77m assets under management**. A focused, high conviction portfolio of quality growth European equities, it has no constraints on regional or country allocations.

2. BMO European Real Estate Securities

This fund was launched a decade ago, yet only has £45m assets under management**. It invests in real estate securities listed in the UK and Europe. The managers are also able to short unfavoured stocks, enabling them to express a wider range of views and better manage risk. This is a big positive given the small size of their investment universe.

3. JOHCM Global Opportunities

This £32m global equity fund** can invest in any company around the world but has a strong bias towards larger and medium-sized multi-national businesses whose revenues are generated from all over the globe. The managers always have an eye on capital preservation. As a result, they are very willing to hold high levels of cash if valuations are unattractive.

4. Unicorn UK Smaller Companies

The Granddaddy of the group, this fund was launched nearly 20 years ago, but like the companies it invests in it remains small, with £52m under management**. It is a true small cap fund that invests in genuinely smaller companies rather than mid-cap stocks. Another positive is that the fund avoids low quality, cash-burning stocks and its concentration allows it to capture the performance from its best ideas.

5. Sanlam Enterprise

Sitting in the targeted absolute return sector, this £74m** long/short equity fund makes money from falling, as well as rising share prices. It invests primarily in the UK and the shorts aren’t just used to dampen volatility but are genuine sources of added value for investors. The managers use a wide range of trusted sources to identify investment themes and stock ideas.

6. Guinness Emerging Markets Equity Income

The baby of the group, this fund has just £3m assets under management**, despite being launched in 2016. Co-managed by Edmund Harriss and Mark Hammond, it follows the Guinness formula, which has already proved successful with their Asian and global equity income funds. The managers have a one in, one-out approach, and each of the final 36 stocks in the portfolio is equally weighted.

*Source: FE fundinfo, total returns in sterling to 5 March 2021
**Source: fund fact sheet, 31 January 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.