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5 most popular growth funds for pension drawdown in 2019

We take a look at some of the most favoured growth funds by our drawdown investors in 2019.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Drawdown is one of the most flexible ways you can access your pension. It also offers the potential for growth through investing. Remember though, investment returns aren’t guaranteed.

Of the clients that have opened a drawdown account with us since January 2014, 45% have not yet started drawing an income from their pension. If you’re planning to do the same you might want to explore how you can grow, or continue to grow your pension.

This article is not personal advice. If you are unsure of the suitability of an investment for you, please seek advice. All investments fall as well as rise in value, so you could get back less than you invest.

Growth investing

If you don’t need an income just yet, a sensible approach could be to choose investments that aim to provide long-term growth. Typically these funds invest in a wide range of companies, either in the UK or across the globe.

We’ve listed below some of the most popular growth funds with our drawdown investors (measured by assets under administration as at 31 December 2019). These funds are listed in alphabetical order. This is for your interest only and shouldn’t be taken as personal advice on where to invest. You should think carefully about your own objectives and how much risk you’re comfortable with when deciding where to invest.

Fund name Key Investor Information (KII)
Fundsmith Equity KII
HL Multi-Manager Special Situations Trust* KII
LF Lindsell Train UK Equity KII
Lindsell Train Global Equity KII
Stewart Investors Asia Pacific Leaders KII

*The HL Multi-Manager Funds are managed by our sister company Hargreaves Lansdown Fund Managers. LF Lindsell Train UK Equity and Lindsell Train Global Equity hold shares in Hargreaves Lansdown plc.

These funds invest in different areas and their managers use different investment styles. Each could provide a starting point to help you build a balanced portfolio but there are no guarantees, and we suggest holding a mix of funds to keep a portfolio well-diversified.

Here I cover two funds in more detail:

Lindsell Train Global Equity

Nick Train, Michael Lindsell and James Bullock aim to keep things simple with this fund. They invest in what they believe to be great companies and aim to hold them for as long as possible.

The managers look for companies with something truly unique, like a recognisable brand name. Companies with well-known brands have lots of loyal customers who buy their products again and again. So they tend to make more sustainable earnings, which can be reinvested back into the business and increase the potential for even more growth.

The managers don’t think there are many truly exceptional businesses in the world, so they make big investments in a small number of companies, which can increase risk. Once they’re invested in a company they’ll usually stay invested for the long term, meaning they rarely sell or make new investments. They tend to focus on larger companies in developed markets, such as the US, UK and Japan, though they have the flexibility to invest in higher-risk smaller companies as well. Charges are taken from capital which could affect the fund’s growth.

Lindsell Train Global Equity is an offshore fund so you’re not usually entitled to compensation through the UK Financial Services Compensation Scheme.

Find out more about Lindsell Train Global Equity inc. charges

Stewart Investors Asia Pacific Leaders

This fund is managed by David Gait, with the support of a wider team of portfolio managers and analysts at Stewart Investors. They have lots of experience between them, have invested in Asian stock markets and used the same investment process for many years.

The team is conservative in the way they manage money. They look for quality Asian companies they think will do well over the long run, even when times get tough for the wider economy. They also specifically look for companies run in a sustainable way. This means sustainability issues, such as climate change, and food and water shortages, as well as management and governance scandals, are taken into account. They only invest in those that make a positive contribution to society and the countries where they're based.

The team invest in a relatively small number of larger companies based across Asia, including some that are based in emerging markets, both of which add risk. They tend to prefer companies that could benefit from rising wealth and consumption in these markets.

Find out more about Stewart Investors Asia Pacific Leaders inc. charges

Investing in drawdown

If you’re looking for some investment inspiration why not download our drawdown guide? It also explains the relationship between investing and taking an income (or not) in more detail.

Guide to investing in Drawdown

What help is available?

If you have any questions, the experts on our helpdesk are always happy to help. They’re available on 0117 980 9926 six days a week: Monday to Thursday 8am - 7pm, Friday 8am - 6pm and Saturday 9:30am - 12:30pm.

The government provides a free and impartial guidance service to help you understand your retirement options - more on Pension Wise.

This article and the information on our website aren’t personal advice. What you do with your pension is an important decision. We strongly recommend you understand all your options and that the option you choose is right for your circumstances. Take advice or seek guidance if you’re unsure. We offer advice if specifically requested.

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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