A fund investing in UK shares is often the first port of call for UK-based investors.
And for good reason. The UK stock market is home to many world-class companies. From international giants selling their products and services across the globe to a diverse array of smaller businesses.
The UK is a rich hunting ground for fund managers. UK Growth funds aim to grow the value of an investor’s money over the long term, although each manager will go about this in a different way. Some focus on larger companies in the FTSE 100 Index, while others invest in higher-risk smaller or medium-sized companies, and some have the flexibility to invest in companies of any size.
Similarly, some fund managers are more constrained than others. Some aim not to deviate significantly from the performance of the broader stock market. Others have more freedom to take risks – they might invest in a small number of companies and run a concentrated portfolio, for example.
The overall makeup of the UK stock market is quite different to other global markets. For example, it includes more oil & gas and financial services companies than many of its peers. We think UK-focused funds can be used to diversify a portfolio of overseas funds. In particular, global funds tend to have a focus on the technology industry, an area that currently only makes up a small part of the UK market.
Many UK companies earn money from operations across the globe, so while they’re listed in the UK, lots of these businesses also operate around the world. This means they aren’t just reliant on the strength of the UK economy to thrive. However, it also means that the UK market can be sensitive to geopolitical developments, including the Russian invasion of Ukraine.
The UK is home to some exceptional fund managers with great track records of adding value. We think the UK is often a good starting point for investors, and most long-term growth portfolios should have some exposure
The decision of which funds to invest in can be difficult, so we’ve narrowed the field to those we think have the greatest long-term performance potential. They feature on the Wealth Shortlist.
Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.
The fund reviews below are provided for your interest but are not a guide to how you should invest. For more information, please refer to the Key Investor Information for the specific fund.
Remember all investments and income from them can fall as well as rise in value so you could get back less than you invest. Past performance is not a guide to the future.
There is a tiered charge to hold funds with HL. It is a maximum of 0.45% p.a. - view our charges.
Wealth Shortlist fund reviews
Chris St John tries to grow investors' money over the long term by investing in high quality companies with the potential to benefit from economic trends. He invests in companies of any size, including higher-risk smaller ones.
The manager looks for themes that are likely to drive stock market growth over the long term and thinks about how they could change consumer behaviour. Then he identifies companies likely to benefit as those themes develop over time. He tends to invest in companies with several common characteristics, including high barriers to entry for competitors, the ability to raise prices without impacting demand for their products or services and experienced senior management teams.
Please note the AXA World Funds UK Equity is an offshore fund so investors may not be protected by the Financial Services Compensation Scheme.
Alex Wright is a contrarian investor. He looks for unloved and undervalued companies where other investors have overlooked the potential for growth or positive change. He'll invest in companies of any size, including higher-risk smaller ones. Wright invests in companies that often go ignored by other investors. Maybe they've missed a profit target, or the management team made some unpopular decisions. Either way, the company must be on the road to recovery. Corporate strategy plays an important part in a company's recovery, so Wright spends lots of time meeting company managers.
As the company improves, its share price should rise as other investors begin to recognise the change. As the price rises, Wright gradually takes profits and moves on to the next unloved opportunity. Remember, not every company will recover, and some may fail altogether. The manager has the flexibility to invest in derivatives which, if used, adds risk.
This fund aims to track the performance of the FTSE 100 – an index of the largest companies listed on the UK stock market.
The fund's made up of around 100 companies across sectors like consumer staples, financials and healthcare. While these companies are based in the UK, many sell products and services across the globe, so they're not solely reliant on the UK economy to be successful. The fund's tracked its index tightly and efficiently since launch although, as you would expect from an index tracker fund, it’s fallen behind the benchmark over the long term because of the costs involved in running the fund.
The fund aims to track the performance of the FTSE All-Share, a broad index of UK companies.
The fund invests in around 587 large, medium-sized, and higher-risk smaller companies based across the UK. Since launch it’s tracked its index tightly and efficiently although, as you would expect from an index tracker fund, it’s fallen behind the benchmark over the long term because of the costs involved in running the fund.
This fund is managed by a team of four whose different strengths, styles and areas of focus are carefully blended together.
The four managers behind this fund are free to invest their portion of the portfolio wherever they see the best opportunities. This means the fund combines more established companies that have consistently grown profits, with those that have been through a difficult time and have the potential to recover.
The blended approach used by the managers, combined with a focus on small and medium-sized companies, makes this fund different to many of its peers. We think it's managed by a strong team with the potential to deliver good returns over the long term. Their investments in smaller companies add risk though.
Anthony Cross and Julian Fosh invest in companies with barriers to entry from competition including intellectual property (such as patents, trademarks or brands), established distribution channels and significant levels of repeat business. They invest in UK businesses of all sizes, including higher-risk smaller ones.
We think the fund's run by two experienced managers with a robust investment process that's served them well over the years. We therefore expect it to deliver good returns over the long term, although there are no guarantees. The managers have the flexibility to invest in derivatives which, if used, adds risk.
Please note this fund holds shares in Hargreaves Lansdown plc.
Latest news on this sector
Joseph Hill | 25 July 2023
We look at what’s happened in the UK economy, how the stock market's been coping, and how our Wealth Shortlist funds have fared. Read article.
25 July 2023 | 7 min read
Please note the research updates are not personal recommendations to trade. If you are unsure of the suitability of an investment for your circumstances please seek advice. Remember all investments can fall as well as rise in value so investors could get back less than they invest.