I have never been a fan of trying to second guess the stock market. In my experience, trying to predict short-term performance leads to indecision, inaction and mistakes. So when I invest in my Stocks & Shares ISA, I like to get the money working for me quickly.
Due to a change in personal circumstances I made my ISA contribution later in the financial year than I normally like to do. Unfortunately this means I missed out on the start of a rally which began in the latter half of 2012. However, I believe if I invest today with a long-term view I will hopefully enjoy excellent returns.
The funds I have picked are based on my personal objectives and timescale. I am 37 years old, and have around another 30 years before I retire. My goals are therefore long-term, and my investment choices reflect this.
Please remember, it is important to choose investments based on your own investment objectives and your attitude to risk.
Like many investors I already have a number of UK equity income funds in my portfolio. However, these are core holdings for me so as my portfolio grows I am increasing my exposure to the sector. This fund has significant exposure, around 40%, to higher risk small and medium-sized companies. There are few stocks in common with other equity income funds, so it complements my existing portfolio. It currently has a generous yield of 4.2% (variable and not guaranteed), and it has the potential to deliver excellent capital growth through its higher risk approach.
I have been investing in this fund for some time and am topping up my holding. Anthony Cross and Julian Fosh believe intellectual capital can give a company an 'economic advantage' - distinctive competitive strengths that others will struggle to replicate. They look for companies which combine this with a secure market position in the UK, or exposure to faster growing international markets, as companies with these qualities have the potential to grow faster than their peers. Although there are no guarantees, this approach has worked well in recent years and I believe it will bear fruit over the long term.
This is another holding I am adding to. It is a core holding in my portfolio as manager, Sebastian Lyon, invests in a broad range of assets with a focus on absolute, rather than relative returns. He aims to shelter capital when markets turn choppy; the idea being that by minimising losses there is less ground to make up when the market rises once more. It is an approach which has worked exceptionally well over the long term, though past performance isn't a guide to future returns. The fund takes a more cautious approach than others in my portfolio, and I believe having managers with different strategies is a good way to diversify my investments.
As I have already explained equity income is a core strategy in my portfolio, and equity income is a growing trend in Asia. In the last 15 years Asian companies have improved their corporate governance and are focused on shareholder returns by way of dividends .The fund tries to combine the exciting growth potential of Asian markets and the attractive dividends of an equity income fund. I believe in manager, Jason Pidcock's ability to generate strong returns over the long term.
If you're considering an investment in any of the mentioned funds please ensure you read the individual Key Investor Information Documents which contain details of the risks involved.
If you are thinking of opening an ISA you can purchase any of these funds, and over 2,400 others, and save up to 5.5% on initial charges - that's as much as £620 on a full ISA subscription.
Most of our clients open their ISAs with a debit card, either over the telephone or online. We've made the process as simple as possible. If you are happy making your own investment decisions and want to apply for your ISA it should take no more than five minutes. Before you apply please ensure you read our Terms & Conditions, Key Features, and the Key Investor Information Documents for any funds you are considering.
Please remember, all stock market investments can fall in value as well as rise so they should be held for the long term and you could get back less than you invest. Tax rules can change and the value of any tax shelters will depend on your personal circumstances. This article is not personal advice so, if you are unsure about the suitability of an investment, please contact us for advice.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.