17 specialist fund and trust tips for 2017

We round up a range of property, sector-specific, single-country and private equity investments from our panels of fund and trust experts.

Banks, biotech and roads: rosy prospects for 2017


Legal & General UK Property


Legal & General UK Property was one of the few big funds that kept its doors open when there was a rush to the exits following June's Brexit vote.

Instead, Legal & General simply revalued its portfolio, giving investors the opportunity to jump ship at a lower price. John Husselbee says fund size is a positive for property.

Threadneedle UK Property AIF


Those worried about the outlook for house prices in London for the next couple of years should consider Threadneedle UK Property AIF, according to Brian Dennehy, who says the fund 'favours smaller holdings with an emphasis ex-London'.

F&C Property Growth & Income

Income and growth

Alan Steel says F&C Property Growth & Income is the only property fund he would consider recommending, in light of the illiquidity issues that plagued the sector last year.

The fund has just 30 per cent in direct property, with the balance invested in property companies located in both the UK and Europe.

TR Property IT

Growth and income

Money Observer Rated Fund tickProperty is popular with several of our trust specialists, including Jean Matterson.

She is sticking with TR Property, which has fallen to a double-digit discount despite its long-term record of good capital and income growth.

Over half the portfolio is in continental European property companies. 'Rents in selected sectors of the property market are gently rising,' she says.

Custodian Reit

Income and growth

Tim Cockerill opts for Custodian Reit, a UK commercial property fund with a high yield that is paid quarterly.

'The focus is on small lot sizes, a section of the market which has become less attractive to large property funds, but which offers high-quality properties and tenants as well as diversification by type.

Empiric Student Property IT

Income and growth

Andrew McHattie explains that Empiric provides comfortable rooms for students, 70 per cent of whom are from overseas. Most come from outside the EU, so the management sees little risk from Brexit.

The trust targets a 6.1p dividend this year, implying a 5.5 per cent yield.

Tritax Big Box IT

Income and growth

Tritax Big Box invests in large distribution warehouses across the UK, notably those with close links to major motorways, sea ports and rail freight hubs.

Its tenants are primarily large retailers with upwards-only rent reviews and leases that typically exceed 10 years' duration.

John Newlands says the solidity of its asset base means its low-cost gearing makes good sense, and he is attracted by its healthy yield.


First State Global Listed Infrastructure

Income and growth

Infrastructure strategies have been widely tipped to receive a boost from the return to fiscal policy in the UK and the US. First State Global Listed Infrastructure is poised to capitalise, says Jason Broomer.

The fund aims to deliver a combination of inflation-protected income and capital growth, through a portfolio of high-quality infrastructure securities listed mainly on developed markets.

Polar Capital Global Technology

Aggressive growth

Money Observer Rated Fund tickOne key difference between this technology boom and the one at the turn of the millennium is that this time it is being fuelled by job creation.

Broomer likes Polar Capital Global Technology's 'emphasis on small and medium-sized companies'. Bear in mind, however, that tech by its nature can be volatile and heavily moved by sentiment.

BlackRock Gold and General

Tactical pick - growth

Gold, and funds such as BlackRock Gold and General, returned to form in 2016, benefiting from various macroeconomic uncertainties, most notably Brexit and the US presidential election, which led investors to scramble towards safe-haven assets.

Gold is virtually impossible to value and doesn't pay an income, but regularly proves its worth when forming a small part of a balanced portfolio in an uncertain environment such as is widely expected in 2017.

JPM Natural Resources

Tactical pick - growth

Under the management of Neil Gregson, JPM Natural Resources has returned an impressive 70 per cent over the past year, although those who have held it since 2011 are still down by 35 per cent.

Brian Dennehy thinks 2017 could be another good year. 'This is a diversified commodity fund for those who believe growth will emerge in key global markets driven by fiscal boosts,' he says.

Jupiter India

Aggressive growth

Like other emerging market regions, India has favourable demographics, with 50 per cent of its population below the age of 25. Over the long run, the high proportion of taxpayers and spenders will provide a boost to the economy.

Dennehy favours Jupiter India due to the experience of fund manager, Avinash Vazirani, who has managed it since 2008.

NB Private Equity IT

Adventurous income

Tim Cockerill likes NBPE, a US-oriented private equity trust which invests in both debt and equity in order to achieve a mix of dividends and capital appreciation.

Cockerill says its portfolio is well-diversified in terms of asset class, vintage, geography, capital structure and industry, and has a good long-term record.

HarbourVest Global Private Equity IT

Core growth

Money Observer Rated Fund tickAndrew McHattie is enthusiastic about the value on offer in private equity and highlights HVPE, which he describes as 'a fund of funds offering diversified exposure at an attractive price'.

'The trust invests in and alongside 34 HarbourVest funds spread across the private equity spectrum,' he says, adding it is top of its peer group over five years.

Ranger Direct Lending IT

Immediate income

Ranger Direct Lending was the star of the direct lending sector in 2016. It is now pretty fully invested and generating a sufficient income to fund its targeted high yield, so Alan Borrows is keeping faith with it.

The trust concentrates on loans of around $300,000 to small and medium-sized US enterprises.

Doric Nimrod 2 IT

Immediate income

Doric Nimrod 2 owns seven Airbus A380-861, leased to Emirates Airlines to 2024. Income from the leases is expected to fund quarterly dividend of 4.5p in that period, as well as paying off the company's borrowings.

When the leases expire, sale of the aircraft is likely to raise potentially significantly more than the current share price.

Biotech Growth IT

Adventurous growth

Money Observer Rated Fund tickManaged by the highly experienced New York-based Orbimed Advisers, Biotech Growth gets the nod from Peter Hewitt.

Clinton's defeat was a relief to the biotechnology sector, and Hewitt expects it to benefit from lots of new products coming on-stream and continued takeover activity.


Robert Burdett

Robert Burdett began managing funds of funds at Rothschild and then Credit Suisse. In 2007 he joined Thames River to help set up its multi-manager business, later taken over by F&C.

Brian Dennehy

Brian Dennehy is managing director of advisory firm Dennehy Weller. In 2012 he launched FundExpert, a fund platform for self-directed investors looking for fund research.

Mick Gilligan

Mick Gilligan is a partner in private client stockbroker Killik & Co. He is currently head of research. He analyses funds and trusts and manages the firm's multi-manager portfolio service.

Jason Broomer

Jason Broomer has more than two decades' experience in fund research and running portfolios for private clients. He runs Square Mile's managed portfolio service.

John Husselbee

John Husselbee is head of the Liontrust multi-asset team. He has 25 years of experience in managing multi-manager portfolios, including at Henderson and Rothschild.

Alan Steel

Alan Steel became an IFA in 1973, and launched his firm Alan Steel Asset Management in 1975. It now advises over 2,000 families, with more than £1 billion under management.


Alan Borrows

Alan Borrows is a senior fund manager at Liverpool-based Seneca Investment Managers, which favours a value-oriented approach to multi-asset investment.

Jean Matterson

Jean Matterson is a partner at Edinburgh-based Rossie House Investment Management, which has long favoured investment trusts for private client portfolios.

John Newlands

John Newlands has overall responsibility for investment trust research at Brewin Dolphin. It has £33 billion under management, of which over £4 billion is in investment trusts.

Tim Cockerill

Tim Cockerill is investment director of Bristol-based Rowan Dartington which has client assets in excess of £1 billion. Investment trusts have featured in its portfolios for many years.

Andrew McHattie

Andrew McHattie runs The McHattie Group, an authorised firm which publishes a specialist investment newsletter. He has been the editor of Investment Trust Newsletter since 1966.

Peter Hewitt

Peter Hewitt has run the F&C Managed Portfolio trust since 2008, having managed its forerunner, F&C Managed Portfolio Service, since 2002. He previously worked at Ivory & Sime.

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