Three value and three growth funds for your ISA

Juliet Schooling Latter 10/02/2017 in Equities

After almost a decade of rock-bottom interest rates and fragile economic prospects, investors have been prepared to pay up for any growth they can find. But are value stocks finally going to make a comeback in 2017?

As ISA season begins in earnest, let’s look at three of my favourite value and growth funds.

Growth funds

Quality growth funds have been very popular with investors for some years now, particularly as growth of any kind and income at a decent level has been increasingly hard to find. With a good manager behind them, growth funds should continue to do well, no matter what the economic climate, and we think they make good core holdings in a portfolio.

Baillie Gifford Global Discovery

Renowned for the quality of its in-house research, Baillie Gifford brought its small-cap teams together in 2011 to form the global discovery team. This fund consists of what the team believe to be the most innovative and fast-growing companies in the world.

Marlborough UK Micro Cap Growth

This is a small-cap growth fund managed by the renowned Hargreave Hale team. The fund is highly diversified and invests in firms with disruptive technologies or companies who are leaders in niche markets. The managers use their vast array of industry contacts and their own team to uncover the best new ideas.

Rathbone Global Opportunities

Rathbone Global Opportunities is a global growth fund looking for simple, scalable businesses with entrepreneurial and flexible management teams. It has been managed by James Thomson for almost a decade. He has a contrarian philosophy, investing in undiscovered or out-of-favour growth companies. He believes there is a bias against growth companies, because the majority of active funds are value driven.

Value picks

Longer term, we suggest investors have a balance of both growth and value funds in their portfolios to avoid style bias. Now seems to be as good a time as any to dip a toe back into value waters.

R&M UK Equity Long Term Recovery

This fund aims to find companies that are yet to deliver on their promise – those experiencing below normal profit levels, which are depressing their valuations, but with the management capability to turn things around. Hugh, the fund manager, said last year that “now continues to represent the best opportunity to buy value type shares since the end of the TMT bubble in 2000”.

L&G UK Alpha Trust

Run by a straight-talking manager who describes himself as a “tight-fisted Yorkshireman” when it comes to his investments, this market capitalisation agnostic fund looks for bargains in all corners of the market and particularly where the manager believes it is inefficient.

Schroder Recovery

A true deep-value fund that invests in the cheapest and most unloved companies in the UK. Investors need to have a high tolerance for volatility, as this fund is liable to be at the bottom of the performance tables one year and the top the next.

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.