Bond, property and multi-asset tips for 2020: finding footholds in uncertain times

We outline a wealth of bond and property investment ideas as well as some multi-asset fund suggestions.

- More expert tips:
- UK fund and trust tips for 2020
Specialist fund and trust tips for 2020
Regional fund and trust tips for 2020
UK share tips: six ‘value’ stocks for 2020
- Six ‘speculative’ share ideas at the start of 2020
Global fund and trust tips for 2020
 

Property

Custodian Reit
SPTR 1 year 4.4%, 3 years 25.4%, yield 6.4%

Custodian Reit invests in UK commercial real estate for an attractive and rising income plus the potential for capital gains. Tim Cockerill says: “The portfolio is well-diversified, with a large number of properties and tenants. The units are small in size, so the manager invests in a part of the market that large property vehicles won’t cover, making it more flexible. The yield is attractive, despite the shares’ premium rating.”
Fund factsheet: Custodian Reit

Secure Income Reit
SPTR 1 year 14.2%, 3 years 51%, yield 4.1%

Secure Income seeks to provide shareholders with a secure and growing income from geared exposure to high-quality property let to financially strong tenants in the healthcare and leisure sectors. The weighted average unexpired term of its leases is more than 21 years, and most have upwards-only RPI-linked rent reviews. Its small premium rating, currently at 3%, reflects its exceptionally strong three-year total returns. Peter Hewitt says: “It is a very safe property firm, with good dividend growth prospects.”
Fund factsheet: Secure Income Reit

Fixed income

Vanguard Global Bond Index
TR 1 year 8.3%, 3 years 9.3%, yield 1.8%

This is a highly diversified tracker with exposure to 11,703 global bonds. It is cheap too: its ongoing charges figure is 0.15%. For almost a decade various commentators have tried to call the end of the 35-year bull market for bonds, but bonds should not be discounted as diversifiers. John Husselbee says: “With little dispersion in returns between government bond markets, we prefer to own a cheap passive product for bond exposure.”
A Money Observer Rated Fund 2020
Fund factsheet: Vanguard Global Bond Index

M&G Global Macro Bond
TR 1 year 6.5%, 3 years 6.5%, yield 2.5%

The future path for bonds is unclear, says Brian Dennehy. “But if we had to entrust our money to anyone, it would be M&G’s Jim Leaviss and the M&G Global Macro Bond fund.” The fund invests across currencies, government and corporate bonds, and developed and emerging markets. Given the unpredictability in bond markets, he likes the fund’s flexible approach and ability to move around the globe to exploit opportunities.
A Money Observer Rated Fund 2020
Fund factsheet: M&G Global Macro Bond

Liontrust Strategic Bond
TR 1 year 7.7%, 3 years n/a*, yield 2.4%

This bond is tipped for the second year on the spin, owing to its experienced management team. Kelly Prior says: “Using income and capital growth, [Liontrust’s] experienced team has designed a truly strategic fund to give something of a traditional bond fund return in a market that has become hooked on extreme expectations. Driven by the macro views of Dave Roberts at the helm, supplemented by the bottom-up analysis of Donald Philips and with Phil Milburn sitting somewhere in the middle, the team scours multiple asset classes and markets to achieve outperformance.”
Fund factsheet: Liontrust Strategic Bond

Multi-asset

Royal London Sustainable Diversified
TR 1 year 17.5%, 3 years 36.5%, yield 1.5%

Royal London invests in growing, innovative firms that have a positive impact on society. Manager Mike Fox manages a mixed-asset portfolio that scores highly in terms of risk-adjusted returns over the past three years. He focuses on long-term themes and trends such as infrastructure and changing demographics. The fund would suit investors looking for balanced exposure to equities and bonds via a sustainability focus. Dennehy describes it as “one of most consistent multi-asset funds around”.
A Money Observer Rated Fund 2020
Fund factsheet: Royal London Sustainable Diversified

RIT Capital Partners IT
SPTR 1 year 9.7%, 3 years 26.3%, yield 1.8%

This trust places a high priority on capital preservation. Its safety-first approach seems to be something investors are prepared
to pay well for, as the trust is trading on a premium of 12%. The trust invests globally in equities, private equity, bonds and hedge funds, with an actively managed currency overlay. Its approach means it shines in downturns but lags in upturns. Tim Cockerill says: “It is an ideal long-term core holding, but wait for the double-digit premium to fall before buying.”
Fund factsheet: RIT Capital Partners IT

Troy Trojan
TR 1 year 7.3%, 3 years 12.1%, yield 0.7%

Troy Trojan’s respected fund manager Sebastian Lyon invests in global shares, government bonds and gold. Ben Yearsley says: “The manager takes a cautious approach, with real preservation of capital (taking account of inflation) an important facet.” Victoria Hasler adds: “The manager has positioned the fund conservatively for a number of years now, as he believes the valuations of many assets remain at extreme levels.”
Fund factsheet: Troy Trojan

Note: (SP)TR = (share price) total return. All performance data Morningstar, as at 1 December 2019. *Insufficient track record.
Read about Money Observer Rated Funds here.

Our fund and trust tips panellists

Our fund experts:

Ben Yearsley is a director at Shore Financial Planning. He formerly worked at Charles Stanley Direct and Hargreaves Lansdown.

Kelly Prior is an investment manager in BMO Global Asset Management’s multi-manager team, which is headed up by Rob Burdett and Gary Potter.

Mick Gilligan joined Killik & Co in 2001 and became a partner in 2004. He specialises in fund research.

John Husselbee is head of the Liontrust multi-asset team. He has more than 25 years’ experience in managing multi-asset portfolios.

Brian Dennehy is managing director at advisory firm Dennehy Weller. He also runs FundExpert, which provides research and insights for self-directed investors.

Victoria Hasler is head of research at Square Mile. Before joining Square Mile, Victoria worked for a Brewin Dolphin as a fund analyst.

Our trust experts:

Tim Cockerill is investment director at wealth manager Rowan Dartington, which is part of St James’s Place. 

John Newlands was head of investment companies research at Brewin Dolphin. He now runs Newlands Fund Research.

Peter Hewitt has managed the BMO (formerly F&C) Portfolio trusts since 2008. He joined F&C in 1999.

Charles MacDonald is a partner at Rossie House Investment Management, which favours trusts for private client portfolios.

Philippa Maffioli joined Blyth-Richmond Investment Managers in 2001. She works with her father, who founded the business.

 

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment