Six ways to invest in an inflationary environment
UK inflation rose to 9% in April, its highest level in 40 years and almost double the rate the Bank...
When it comes to our investments, most of us start off with a ‘core’ – the assets or funds at the centre of our portfolio that will form the mainstay of our savings.
For some, this core is a multi-asset fund – a fund that, as the name suggests, invests in lots of different assets and has a manager that does all the work for you. Others like to build their own core – often including things like UK and global equities and bonds.
As our portfolio grows in value, or as our confidence as an investor increases, we then start to add some satellite or specialist investments to the mix.
There is no hard and fast rule as to what this satellite part of a portfolio may hold, and very much will depend on the individual investor, their requirements and often their interests. They could be looking to add another source of income, or they could be investing in something that has simply caught their eye.
For those looking to add something a little extra to their ISA investment this year, here are six specialist funds to consider:
This fund has the flexibility to invest across the whole emerging market bond spectrum. It can invest in both government and corporate bonds, denominated in local currencies or in the US dollar (‘hard’ currency). The manager uses her vast skill set in this asset class to analyse the macroeconomic environment, and individual companies, to pick what she believes to be the best mix of bonds for this portfolio.
This trust invests in the shares of property companies of all sizes, typically within Europe and the UK. It will also have a small amount invested in physical property in the UK. Its managers look for well-run businesses in sectors including residential, industrial property, retail, office, and alternatives (which includes student accommodation, self-storage and healthcare).
This is a concentrated portfolio of ideas from the global financial services sector and associated firms. It will include businesses such as stock exchanges and online payment companies, as well as insurers and banks. The manager prefers businesses with sustainable growth characteristics and identifies these with a thematic approach, which looks at the wider trends driving the economy, and the impact these have on the financial services sector.
This trust invests in a healthcare stocks from around the globe. These companies will predominantly come from four sub-sectors: pharmaceuticals, biotechnology, medical technology and healthcare services. The portfolio is split into two segments: growth and innovation with a circa 90/10 split. The growth element is made up of predominantly larger companies, whereas the innovation pot will invest into medium and smaller companies.
This is a concentrated fund investing in gold mining companies. The manager’s philosophy is that investing in gold equities is better than investing in gold itself. He believes that gold equities offer leverage to the gold price – so if you believe in gold, you are better off owning gold equities. In addition, unlike physical gold, many gold miners pay a dividend and these pay-outs have been rising in recent years.
This fund gives investors exposure to companies in Latin America. It is managed by Aberdeen Standard’s renowned emerging markets team, whose primary investment concern is whether companies demonstrate outstanding quality characteristics, such as strong management and balance sheets, this is followed by a value approach – targeting stocks which appear to trade for less than they should do. The strategy has had considerable success across the region.