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Wealth 150 - Our favourite funds in each sector

The Wealth 150

The Wealth 150

A list of favourite funds from our experts

The Wealth 150+ is our selection of the best funds available to UK investors. We believe Wealth 150+ funds offer the ultimate combination of first-class performance potential and low management charges. In many cases these low charges are exclusive to HL clients.

The Wealth 150 is a broader list of funds we believe have excellent long-term prospects. We consider them superior to other options in the sector, but they don’t have quite the same combination of ‘best-in-class’ performance potential and low charges as Wealth 150+ funds.

How do we select Wealth 150 funds?

  • Detailed assessments of fund investment strategies
  • In-depth mathematical analysis to find those funds that have produced consistent outperformance
  • Thousands of hours of interviews with leading fund managers
The Wealth 150 is designed for people who would like to choose their own funds. It doesn't constitute a personal recommendation. If you have any doubts as to the suitability of an investment for your circumstances, please contact us for advice. The value of investments can fall as well as rise so you could get back less than you invest.

Change view: Charges and discounts | Prices and yields | Annual percentage growth | Features & income

In some cases the ongoing saving is provided by our loyalty bonus. This is a rebate on the annual charge which is tax-free in an ISA or SIPP but may be subject to tax in a Fund & Share Account. See the factsheet for more details.

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Asia Pacific & Emerging Markets

Our view on the Asia Pacific & Emerging Markets sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 1.18% 0.50% i 0.68% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.98% 0.29% i 0.69% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.92% 0.05% i 0.87% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Corporate & Government Bonds

Our view on the Corporate & Government Bonds sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.58% 0.09% i 0.49% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.58% 0.09% i 0.49% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.57% 0.10% i 0.47% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.75% 0.12% i 0.63% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.37% 0.15% i 0.22% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.84% 0.43% i 0.41% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Europe

Our view on the Europe sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.81% 0.10% i 0.71% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.84% 0.14% i 0.70% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.88% 0.15% i 0.73% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.83% 0.10% i 0.73% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Flexible, Mixed & Targeted Absolute Return

Our view on the Flexible, Mixed &
Targeted Absolute Return sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.87% 0.09% i 0.78% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.45% 0.08% i 0.37% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.80% 0.35% i 0.45% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.71% 0.075% i 0.635% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.79% 0.10% i 0.69% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.62% 0.02% i 0.60% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.60% 0.20% i 0.40% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Global

Our view on the Global sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.77% 0.20% i 0.57% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Japan

Our view on the Japan sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.97% 0.10% i 0.87% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.92% 0.25% i 0.67% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Specialist

Our view on the Specialist sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 1.28% 0.40% i 0.88% View factsheet Deal
Wealth 150 Plus fund 0.00% 1.01% 0.26% i 0.75% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

UK Growth

Our view on the UK Growth sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.75% 0.20% i 0.55% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.81% 0.15% i 0.66% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.79% 0.05% i 0.74% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.85% 0.20% i 0.65% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.91% 0.16% i 0.75% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.99% 0.22% i 0.77% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.87% 0.27% i 0.60% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

UK Income

Our view on the UK Income sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.79% 0.09% i 0.70% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.75% 0.15% i 0.60% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.79% 0.15% i 0.64% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.80% 0.26% i 0.54% View factsheet Deal
Wealth 150 Plus fund 0.00% 0.82% 0.10% i 0.72% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

Unclassified

Our view on the Unclassified sector »

Net initial chargeAnnual chargeActions
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
Wealth 150 Plus fund 0.00% 0.73% 0.15% i 0.58% View factsheet Deal

Change view: Charges and discounts  |  Prices and yields  |  Annual percentage growth  |  Features & income

November 2015

Asia and emerging markets were once the world's hottest investment destination. Blessed with fast economic growth and young populations, the region was expected to help transform the world's economic development.

Fast forward to the present day and the eastern world has fast become one of the most unloved areas to invest. China, once seen as the expanding engine of global economic growth, has slowed. In turn this has impacted commodity-rich nations, including Brazil, which have previously relied heavily on exporting their resources to countries such as China.

The prospect of higher interest rates in the US has also put a dent in investor sentiment. A world of ultra-low interest rates has seen the level of US dollar-denominated debt soar across the emerging markets. When interest rates rise, some believe those debts could become unsustainable.

It has undoubtedly been a difficult period for the region, and there could be further turbulence to come. That said, it should not be forgotten that growth across the developing world is a long-term story. Recent volatility means the emerging markets now look good value, in our view, and contrarian investors with strong constitutions might think about dipping their toes into this out-of-favour region.

November 2015

Funds in these sectors blend a range of equities and bonds, and some can hold alternative investments which can offer shelter during falling markets. They encompass a wide variety of strategies from the cautious to the more adventurous.

Funds in the Flexible Investment sector can invest up to 100% in shares or invest a large proportion in bonds or cash. Funds in the Mixed Investment 40-85% Shares sector invest in both bonds and shares, but the allocation to shares must be between 40% and 85%. In the Mixed Investment 20-60% Shares sector funds are likely to have a higher allocation to corporate bonds than the two sectors mentioned previously, and the shares element can be between 20% and 60%. The Mixed Investment 0-35% Shares sector is home to funds that can only hold up to 35% in shares, and are therefore likely to hold the largest weighting in bonds.

The Targeted Absolute Return sector differs in that funds can actively use strategies to try and minimise the impact of falling stock markets. This means they can perform quite differently from more traditional funds.

November 2015

The cry “bond bubble” has been heard almost continuously for four years now. The theory was that when interest rates started to rise, bond prices would fall. This is sound logic. When interest rates rise, the fixed income offered by bonds appears less attractive. Bond yields rise to compensate, meaning prices fall.

Yet here we are in late 2015 and rates have still not risen in the UK or US. Economic growth has only been modest and inflation virtually non-existent. Central banks have been under no pressure to increase rates.

Furthermore, governments have borrowed on a huge scale and while UK consumer debt has fallen, it hasn't fallen by much. It wouldn't take much of an interest rate rise for households to feel the squeeze. Recent data for the services sector (which accounts for the lion's share of the economy) suggested a slowing in demand.

It seems quite possible to us therefore, that there will be no rate rise in 2016 for the UK. This means that while gilts hardly look a bargain, there is little reason to see an imminent crash. Corporate bond yields are over 3% which, against deposit rates of 1%, look quite good.

The US economy has been a little stronger, but on the whole the signals are similar to the UK. 2016 is a presidential election year, meaning rate decisions will probably be put on hold from June to November. Therefore, if rates are to rise meaningfully they must start soon. If it happens, will it hurt bonds? We don't think so. Markets could even rise in relief that a decision has been made.

In conclusion, we expect a very benign environment for bonds against a background of low inflation and high debt levels. We have always said the recovery from the 2008 crisis would be a long, drawn-out affair.

November 2015

The Greek debt saga made headlines again over the summer, and many investors still view Europe with suspicion. While it's unlikely we have heard the last of the debt crisis, the outlook for European companies is not as bad as some headlines imply.

Many European companies have worked hard to cut costs since the depths of the financial crisis, emerging leaner and more efficient. Retail sales and consumer spending have started to pick up and with fewer costs to cover, this should feed through to profits. Companies with overseas sales should also feel encouraged as the US recovery continues to strengthen while the UK economy is also in reasonable shape.

The improving backdrop has already started to feed through to company earnings and this bodes well for European stock markets, in our view. If earnings growth continues, share prices should ultimately follow. Although the shares of European companies have already recovered somewhat, they still look cheap compared with both their own history and other developed markets.

We believe the European sector features a number of highly-talented fund managers, of which our favourites feature here.

Wealth 150 - Our favourite funds in each sector

November 2015

Funds in these sectors blend a range of equities and bonds, and some can hold alternative investments which can offer shelter during falling markets. They encompass a wide variety of strategies from the cautious to the more adventurous.

Funds in the Flexible Investment sector can invest up to 100% in shares or invest a large proportion in bonds or cash. Funds in the Mixed Investment 40-85% Shares sector invest in both bonds and shares, but the allocation to shares must be between 40% and 85%. In the Mixed Investment 20-60% Shares sector funds are likely to have a higher allocation to corporate bonds than the two sectors mentioned previously, and the shares element can be between 20% and 60%. The Mixed Investment 0-35% Shares sector is home to funds that can only hold up to 35% in shares, and are therefore likely to hold the largest weighting in bonds.

The Targeted Absolute Return sector differs in that funds can actively use strategies to try and minimise the impact of falling stock markets. This means they can perform quite differently from more traditional funds.

November 2015

Concern over slowing growth in China, along with a potential interest rate rise in the US, has added to longer-term political issues across Eastern Europe and the Middle East to cause volatility in global stock markets.

China is shifting its focus from commodity-intensive industries towards the services sector. An oversupply of oil and commodities against falling global demand could be good for developed markets as lower prices will have the effect of a tax-cut for many consumers. However, it could prove challenging for many emerging markets as many of them derive a large portion of their income from the sale of raw materials.

Volatile markets can provide long-term investors with the opportunity to purchase investments at discounted prices. The global universe of investable companies is vast, providing no shortage of opportunities for skilled stock pickers to exploit. Funds in this sector can also provide valuable diversification, offering exposure to a range of different sectors, regions and currencies.

November 2015

Given its proximity to China and the rest of Asia, Japan has not escaped the recent negative sentiment afflicting the region. With expectations for economic growth being revised down, particularly in China; and domestic consumer spending falling, Japan's economic recovery is under pressure. However, there are signs wage growth is starting to pick up and company earnings have continued to grow.

Furthermore, the stock market remains attractively valued, both in relation to its long-term average and when compared with other major stock markets globally. We often advocate having exposure to attractively valued areas and Japan is no exception. We believe that for long-term, patient investors able to tolerate the inevitable short-term ups and downs, Japan presents an attractive opportunity.

November 2015

The US stock market, as measured by the S&P 500 index, is broadly flat so far this year and currency has had little impact for UK-based investors. The first six months of the year were generally positive, but the third quarter saw some sharp stock market falls.

Earnings of US companies have started to fall, according to our analysis. We tend to believe that corporate earnings drive the long-term path of stock markets, and it is too early to tell if the recent dip is the start of a prolonged downturn or a temporary blip.

In the short-term the issues that caused the recent stock market volatility have not gone away. At the time of writing the third-quarter company reporting season is about to get underway in the US and all eyes will be on company earnings, particularly in the technology and biotechnology sectors to see if growth justifies the share prices and valuations being put on companies.

Investors quote the mantra “when the US sneezes, the world catches a cold” for a reason. It is the world's largest economy and stock market. Issues affecting the US will therefore affect markets globally. The US is in the position it is for a reason though. The capacity for US companies to innovate and disrupt entire markets is virtually unsurpassed, as is their ability to become world leaders in their field. For this reason we would not write off the US on a long-term view and most balanced portfolios would have at least some exposure.

View our Core Tracker funds

November 2015

The specialist sector contains funds which are generally used to provide diversification beyond the mainstream sectors and to provide exposure to specific industries or countries.

November 2015

It has been a tumultuous year for global markets, and the UK has been not exempt. An uncertain outlook for global economic growth and ambiguity over the first interest rate rise has contributed to market jitters. During turbulent times or periods of market stress, larger companies have generally fared better than their small and medium-sized counterparts, as they are generally seen as more financially stable. However, the reverse has been true over the course of the year.

A large portion of the FTSE 100, which represents the UK's largest companies, comprises oil, gas and commodity companies - all areas which have experienced a torrid time. Many of these companies also have a high level of global exposure and the market has therefore reacted strongly to worldwide news such as the slowdown in China. In contrast, small and medium-sized companies tend to be more domestically focused, with performance more closely linked to the UK economy. UK funds with a bias towards smaller businesses have therefore tended to outperform those with a larger company focus.

Over the longer term we have been impressed with the performance of each of our preferred managers in this sector, regardless of the size of company on which they focus. Our favourites are listed here.

November 2015

The sector has experienced a number of headwinds over the past year. Most equity income funds focus on high-yielding larger companies in the FTSE 100, 20% of which are oil, gas and commodity companies - all areas which are experiencing a torrid time due to the collapse in the oil price and slowing growth in China. Many of the largest UK companies also have a high level of global exposure, with around 75% of their earnings generated overseas. Their share prices therefore reacted strongly to the news of a slowdown in China as they anticipate it will lead to a lower consumption of goods, hitting bottom lines.

Against this backdrop, smaller companies outperformed their larger counterparts and managers who were biased towards this area have generally performed relatively well. The shares of small and medium-sized companies paying attractive dividends have also performed better than their lower yielding counterparts

With interest rates having now spent six years at 0.5%, and a rise not looking likely until 2016 at the earliest, we expect the popularity of equity income funds to continue. However, fund managers are beginning to find it harder to uncover attractively valued shares which generate sufficient income. In our view, this means it is more important than ever to invest in funds with exceptional managers able to stand out from the crowd.

Taxable loyalty bonuses within the Fund & Share Account

HMRC believes that from April 2013 rebates of annual charges (such as loyalty bonuses) paid on funds held in nominee accounts, such as our Fund & Share Account, should be subject to income tax. Loyalty bonuses paid on funds in ISAs and SIPPs are unaffected, and they remain tax-free.

We believe all loyalty bonuses are tax-free and we are challenging HMRC's interpretation. However, while we make this challenge we are paying loyalty bonuses within the Vantage Fund & Share Account net of an amount equivalent to the basic rate tax. If we are successful in our challenge we will return this money to clients. If we are unsuccessful we will use the money to pay over any amounts due to HMRC.

If loyalty bonuses are taxable then the value of our ongoing saving to you could be reduced, depending on the rate of tax you pay. The below table gives an indication of how this may affect you.

In this case, the ongoing saving is 0.06%, of which 0.06% is paid by loyalty bonus. The tax that could be payable on this loyalty bonus, and therefore the value of this saving to you, is shown below.

Non-taxpayer Basic rate taxpayer Higher rate taxpayer Additional rate taxpayer
Ongoing saving from HL: 0.06% 0.06% 0.06% 0.06%
Loyalty bonus: 0.06% 0.06% 0.06% 0.06%
Tax on loyalty bonus: 0.00% 0.012% 0.024% 0.027%
Value of ongoing saving to you: 0.06% 0.048% 0.036% 0.033%

Tax rules can change and benefits depend on individual circumstances. Please remember loyalty bonuses received on funds held in the Vantage ISA or Vantage SIPP are exempt from tax.

Also, loyalty bonuses received by overseas investors, companies and charities are not required to be paid with the deduction of tax. Therefore, if you are an overseas investor, or you represent a company or charity please let us know if you would like your loyalty bonuses paid without the deduction of an amount equivalent to the basic rate tax.