Global fund and trust tips: our experts name their growth and income choices

Our fund and trust panellists share their global growth and income choices for the year ahead. We also highlight two wildcard selections that look particularly good value at the start of 2019.


Fundsmith Equity
TR 1 year 11.4%, 3 years 75.8%, yield 0.5%

Once again Fundsmith Equity, managed by respected investor Terry Smith, was in favour among our panellists. Since launch (in 2010) the fund has impressed, posting annualised returns of 18.1% against 6.7% for the IA global sector average. Smith’s approach of selecting high-quality names that should in theory stand the test of time has served investors well, and in the event of more volatile market conditions the strategy looks well placed. Mick Gilligan of Killik adds: “The stocks held tend to generate high returns on capital and compound these returns via high reinvestment rates.” (2019 Money Observer Rated Fund)
Fund factsheet: Fundsmith Equity

The Bankers IT
SPTR 1 year -1.3%, 3 years 41.7%, discount -2.8%, yield 2.4%

Bankers targets capital and income growth from a broadly diversified global portfolio. It has raised its dividend for 51 successive years, and its costs are low with an ongoing charges figure of 0.44%. Tim Cockerill of Rowan Dartington likes it because Alex Crooke has been lead manager since 2003 and is supported by six very experienced regional specialists. Another key draw is its growing dividend. “It is an excellent long-term core holding,” he adds. (2019 Money Observer Rated Fund)
Fund factsheet: The Bankers IT

Standard Life Global Smaller Companies
(small cap)
TR 1 year 5.4%, 3 years 66.9%, yield 0% 

Over long timescales, authoritative studies have shown that in regard to investment small is beautiful, with smaller companies outperforming big businesses. To play this trend, Ben Yearsley of Shore Financial Planning picks out Standard Life Global Smaller Companies. “Standard Life has an excellent team of small-cap specialists and this fund essentially has their best ideas from around the globe.” He adds that small caps do have a tendency to go in and out of favour, particularly when markets are volatile, so investors should buy and forget. (2019 Money Observer Rated Fund)
Fund factsheet: Standard Life Global Smaller Companies


Artemis Global Income
TR 1 year -2.8%, 3 years 29.9%, yield 3.2%

Backed last year, this fund makes the grade again in 2019. A former star performer in the Investment Association global equity income sector, the fund has slipped behind rivals on a three-year view, up 30% against 34% for the sector. Experts, though, retain their backing, pointing out that the fund has been going against the crowd with a lighter weighting to the US than peers, instead favouring Europe and with a small weighting to emerging markets. (2019 Money Observer Rated Fund)
Fund factsheet: Artemis Global Income

Henderson International Income IT
SPTR 1 year -1.4%, 3 years 44.6%, discount -0.2%, yield 3.3%

Henderson International Income Trust differs from other global equity income trusts in specifically excluding the UK. This makes it attractive to Peter Hewitt of BMO (formerly F&C), who believes other regions will be more rewarding over the next 12 months. Ben Lofthouse has been lead manager since launch in 2011, and favours companies that are undervalued, market-leading and generating sufficient cashflow to finance both dividends and reinvestment. Hewitt says: “It is sensibly run, paying a well-covered and rising dividend.” (2019 Money Observer Rated Fund)
Fund factsheetHenderson International Income IT


Caledonia Investments IT
SPTR 1 year 6.6%, 3 years 34%, discount -18.8%, yield 2%

This trust invests for growth in a globally diversified portfolio of directly and indirectly managed quoted and unquoted investments. Will Wyatt, who has been chief executive since 2010, is a scion of the Cayzer family, which dominates the share register. “Family-dominated companies think long-term and Caledonia has been a successful steward of capital over decades,” says Sandy Cross of Rossie House. The discount is described by Cross as “exceptionally wide”, and should catch the eye of those looking for a bargain.
Fund factsheet: Caledonia Investments IT

River & Mercantile Global Recovery
TR 1 year -5.1%, 3 years 44.9%, yield 0.8%

For investors seeking a high-octane approach to global equities, this fund fits the bill, argues Jason Broomer of Square Mile. He points out the fund has a bias to small and medium-sized companies and also tilts towards value stocks. He adds: “This does mean it can be prone to periods of more variable returns. However, the manager (Hugh Sergeant) has a good level of experience of investing in ‘recovery-type’ situations and we think this fund could be highly rewarding for investors with a longer-term investment horizon.”
Fund factsheet: River & Mercantile Global Recovery

Note: fund tips are shown in green and investment trust tips in blue. (SP)TR = (share price) total return.  All performance data as at 1 December 2018. 
Read about Money Observer Rated Funds here.

Our wildcard tips explained

This year we asked our experts for wildcard picks: out-of-favour funds where a catalyst for a change in fortunes is expected, making them value opportunities. Investment trust bargains can be spotted by assessing the discount relative to historic highs and lows. Picking open-ended fund bargains is more art than science.

Our fund and trust tips panels

Our fund experts:

Kelly Prior is an investment manager in BMO Global Asset Management’s multimanager team. She joined the group from Thames River Capital in 2007.
Brian Dennehy is managing director at advisory firm Dennehy Weller. He also runs FundExpert, which provides research and insights for self-directed investors.
Mick Gilligan joined Killik & Co in 2001 and became a partner in 2004. He was previously an investment specialist at a private client advisory business.
Jason Broomer has more than two decades’ experience in fund research. He runs Square Mile’s portfolio service.
John Husselbee is head of the Liontrust multi-asset team. He has more than 25 years’ experience in managing multi-asset portfolios.
Ben Yearsley is a director at Shore Financial Planning. He was formerly head of investment research at Charles Stanley Direct.

Our trust experts:

Tim Cockerill is investment director at wealth manager Rowan Dartington, which is part of St James’s Place. It is responsible for client assets in excess of £1.5 billion.
Sandy Cross is a partner at Rossie House Investment Management, which has long favoured investment trusts for private client portfolios. He joined RHIM in 2012.
John Newlands worked for nearly a decade as head of investment companies research at Brewin Dolphin. He is founder of Newlands Fund Research.
Peter Hewitt has managed the BMO (formerly F&C) Managed Portfolio trusts since 2008. He joined F&C in 1999.
Charles Murphy is head of listed investment companies analysis at Panmure Gordon, which he joined in November 2012.

More expert tips:


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