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Investment ideas for 2019

Opportunities in uncertain times


Kate Marshall
Senior Investment Analyst

Five funds to watch in 2019

The political and economic picture is as uncertain as it was last year, but we think that makes for exciting opportunities.

If you believe companies can navigate political waters, as they have so many times in the past, they should be able to continue to sell products that people and businesses need and want. They should reward shareholders along the way, though there aren’t any guarantees.

Now you might cite Brexit, or a US-China trade war, as a reason to hold off. But there’s an old adage we strongly believe in – ‘be greedy when others are fearful’.

Each fund we’ve highlighted this year is very different to the next. We look at funds that:

  • Offer an impressive 3.9% yield, variable and not a guide to future income, investing in the UK
  • Invest in some of the world’s fastest growing economies
  • Take advantage of the most undervalued developed market, Japan
  • Hold a wide mix of investments and is managed with a cautious view
  • Aims to invest in the best businesses in the world

While we’ve carefully selected these funds for the year ahead, investments should always be made for the long term. We suggest at least 5 years. This article isn’t personal advice or a recommendation to invest, and remember all investments can fall as well as rise in value – you could get back less than you invest. If you’re not sure an investment is right for you, please seek advice.

Threadneedle UK Equity Income

  • Richard Colwell is an experienced equity income manager with a great track record
  • Shorter-term political struggles don’t turn good businesses bad overnight
  • A focus on quality companies that can grow their earnings sustainably

Threadneedle UK Equity Income

  • Richard Colwell is an experienced equity income manager with a great track record
  • Shorter-term political struggles don’t turn good businesses bad overnight
  • A focus on quality companies that can grow their earnings sustainably

Invest now

JPMorgan Emerging Markets

  • An opportunity to take advantage of lower prices
  • Two experienced managers and a wide team of analysts
  • A focus on quality companies that can grow their earnings sustainably

JPMorgan Emerging Markets

  • An opportunity to take advantage of lower prices
  • Two experienced managers and a wide team of analysts
  • A focus on quality companies that can grow their earnings sustainably

Invest now

Schroder Tokyo

  • Our analysis shows Japan is still one of the most undervalued developed markets
  • Andrew Rose, the fund’s manager, has been investing in Japan for almost three decades
  • Aims to invest in companies when they’re overlooked by other investors

Schroder Tokyo

  • Our analysis shows Japan is still one of the most undervalued developed markets
  • Andrew Rose, the fund’s manager, has been investing in Japan for almost three decades
  • Aims to invest in companies when they’re overlooked by other investors

Invest now

HL Multi-Manager Strategic Assets

  • Aims to deliver some growth over the long run, but offer some shelter in tough markets
  • The core of the fund is made up of managers that have lots of flexibility
  • Invest in a mix of investment types including shares, bonds, commodities and cash

HL Multi-Manager Strategic Assets

  • Aims to deliver some growth over the long run, but offer some shelter in tough markets
  • The core of the fund is made up of managers that have lots of flexibility
  • Invest in a mix of investment types including shares, bonds, commodities and cash

Invest now

Lindsell Train Global Equity

  • A simple solution for investing in global markets
  • Aims to invest in great companies and hold them forever
  • We view the managers as some of the most successful stock pickers

Lindsell Train Global Equity

  • A simple solution for investing in global markets
  • Aims to invest in great companies and hold them forever
  • We view the managers as some of the most successful stock pickers

Invest now

George Salmon and Nicholas Hyett
Equity Analysts

Five shares to watch in 2019

We thought picking five shares to watch in 2019 would be a daunting task. Should we prepare for a Brexit bounce, or buckle in for some serious turbulence?

In the end, all that uncertainty has actually made for some clear decisions. We’ve leant towards high-quality, long-run growth stories with management track records we feel we can trust.

This article isn’t personal advice or a recommendation to buy, sell or hold any investment. All investments fall as well as rise in value so you could get back less than you invest. Yield figures are variable and not guaranteed. They should not be seen as a reliable indicator of future income.

Intertek – where quality counts

  • Core product quality business boosted by continued product innovation
  • High cash generation
  • Solid track record, good growth prospects and resilient revenue streams

Intertek

  • Core product quality business boosted by continued product innovation
  • High cash generation
  • Solid track record, good growth prospects and resilient revenue streams

See price and charts

GVC – rolling the dice

  • Established high street name and digital disruptor
  • Exciting growth opportunity in the US
  • Prospective yield of 4.8% (variable, not a reliable indicator of future income)

GVC

  • Established high street name and digital disruptor
  • Exciting growth opportunity in the US
  • Prospective yield of 4.8% (variable, not a reliable indicator of future income)

See price and charts

Primary Health Properties – looking healthy

  • Properties in demand, and asset values climbing
  • Expansion into Ireland provides more room for growth
  • Prospective yield of 5.1% (variable, not a reliable indicator of future income)

Primary Health Properties

  • Properties in demand, and asset values climbing
  • Expansion into Ireland provides more room for growth
  • Prospective yield of 5.1% (variable, not a reliable indicator of future income)

See price and charts

Unilever – no one trick pony

  • Another power brand to join the portfolio
  • Population growth provides tailwinds
  • 2.5bn consumers use the household brands every day

Unilever

  • Another power brand to join the portfolio
  • Population growth provides tailwinds
  • 2.5bn consumers use the household brands every day

See price and charts

Activision Blizzard – Where it pays to play

  • Global gaming spend is expected to hit $138bn this year
  • Profit growth of 8.8% a year since 2008
  • Owns its most powerful brands outright

Activision Blizzard

  • Global gaming spend is expected to hit $138bn this year
  • Profit growth of 8.8% a year since 2008
  • Owns its most powerful brands outright

See price and charts

Richard Troue
Head of Investment Analysis

Five investment trusts to watch in 2019

From a UK investor’s perspective 2018 is unlikely to go down as a vintage year. With the notable exception of the US, most major stock markets delivered lacklustre performance.

We saw a lot of ups and downs too, mostly as investors reacted to economic or political news. Brexit dominated the headlines, of course. But the ongoing spat between the US and China also rattled confidence.

A bit of volatility is no bad thing though. It gives you the chance to invest in good-quality trusts at lower prices. And when you look back in five or ten years’ time, the decision to buy something that, at the time, looked unfashionable could turn out to be quite profitable. Please remember all investments go up and down in value, and you might get back less than you invest.

Take the UK, for example. Lots of investors can’t see past Brexit. So UK companies, and trusts that invest in them, have fallen out of favour.

Investment trusts can borrow money in order to buy more investments. This is called ‘gearing’. It magnifies gains and losses, so if used it increases risk. Please make sure you’re comfortable with a trust’s approach to gearing, and the costs and charges, before investing. Details can be found in the trust’s annual report. Please read each trust’s Key Information Document too.

Edinburgh Investment Trust

  • An emphasis on unloved UK business
  • Potential to pay good dividends, although not guaranteed
  • Attractive discount to NAV – 8.3%

Edinburgh Investment Trust

  • An emphasis on unloved UK business
  • Potential to pay good dividends, although not guaranteed
  • Attractive discount to NAV – 8.3%

See price and charts

Murray International Trust

  • Invests in companies and bonds from around the world
  • Potential for attractive dividend
  • Trading at 3.7% discount to NAV

Murray International Trust

  • Invests in companies and bonds from around the world
  • Potential for attractive dividend
  • Trading at 3.7% discount to NAV

See price and charts

Fidelity China Special Situations

  • We see a lot of long-term potential in China
  • Manager Dale Nichols has the support of an experienced and well-resourced team
  • The trust trades on a discount to NAV of 12.5%

Fidelity China Special Situations

  • We see a lot of long-term potential in China
  • Manager Dale Nichols has the support of an experienced and well-resourced team
  • The trust trades on a discount to NAV of 12.5%

See price and charts

Personal Assets Trust

  • Aims to preserve and increase your investment over the long-term
  • Invests in large companies, US government bonds, gold and cash
  • A balanced approach can come into its own when markets fall

Personal Assets Trust

  • Aims to preserve and increase your investment over the long-term
  • Invests in large companies, US government bonds, gold and cash
  • A balanced approach can come into its own when markets fall

See price and charts

Witan Investment Trust

  • Invests in a selection of high-quality fund managers
  • Brings together different areas of expertise from around the world
  • Diversified across different countries, sectors and currencies, all in one investment

Witan Investment Trust

  • Invests in a selection of high-quality fund managers
  • Brings together different areas of expertise from around the world
  • Diversified across different countries, sectors and currencies, all in one investment

See price and charts