Global fund and trust tips for 2020: growth and income options

The whole world is your investment oyster and global funds have flexibility to invest wherever they see opportunity. Here are the experts’ choices.

More expert tips:
- UK fund and trust tips for 2020
Bond, property and multi-asset 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

Growth

The Bankers IT
SPTR 1 year 17.1%, 3 years 51.8%, yield 2.1%

Tipped in 2019 and recommended once again. Performance is solid and costs are low, with an ongoing charge figure of 0.5%. Rossie House’s Charles Macdonald praises “the wise overall stewardship of [lead manager] Alex Crooke, who harnesses the skills of the regional specialists within Janus Henderson”. Bankers has separate regional portfolios, run by regional specialists. The yield is modest, but dividend growth track record is compelling.
A Money Observer Rated Fund 2020
Fund factsheet: The Bankers IT

Baillie Gifford Positive Change
TR 1 year 14.6%, 3 years n/a*, yield n/a

Backs high-quality growth companies that deliver positive societal change in one of four areas: addressing the needs of the world’s poorest populations, social inclusion and education, environment and resource needs, healthcare and quality of life. FundExpert’s Brian Dennehy notes the fund has the wind in its sails, with strong three and six-month performance. He adds: “It taps into some big themes and has real momentum at the moment.”
Fund factsheet: Baillie Gifford Positive Change

North Atlantic Smaller Companies IT
SPTR 1 year 11.7%, 3 years 25.3%, yield 0.7%

Targets capital growth from a very concentrated portfolio of quoted and unquoted smaller companies, primarily in the US and UK. Manager and major shareholder Christopher Mills takes a proactive interest in the trust’s holdings. Charles Macdonald says Mills has an excellent long-term track record and the skills to capitalise on the growing lack of research into small caps.
Fund factsheet: North Atlantic Smaller Companies IT

Income

Scottish American IT
SPTR 1 year 15.2%, 3 years 45.6%, yield 3%

Targets sustained real dividend growth by growing assets faster than inflation. Shareholders’ funds are invested in an internationally diversified equity port- folio, while borrowed funds are invested mainly in UK properties. Managers James Dow and Toby Ross favour companies demonstrating “resilience and dependability”. Net asset value total returns are ahead of other global income trusts over most periods, but the yield is lower. Peter Hewitt likes the manager’s stockpicking style, and expects dividend growth to strengthen.
A Money Observer Rated Fund 2020
Fund factsheet: Scottish American IT

Fidelity Global Dividend
TR 1 year 14.6%, 3 years 33.2%, yield 2.5%

Although its history doesn’t span a full market cycle (launched in 2012), the fund has been a solid performer, generating outperformance in more difficult markets and keeping up in strongly rising markets. Manager Dan Roberts invests in good-quality companies on reasonable valuations, and according to Mick Gilligan the value focus should stand the fund in good stead at this juncture. He adds: “The valuation differential versus value (out of favour) stocks looks too wide.”
A Money Observer Rated Fund 2020
Fund factsheet: Fidelity Global Dividend

Wildcards

WC Global Enhanced Dividend
TR 1 year 1.4%, 3 years 14.3%, yield n/a

Performance has struggled over the past couple of years, but BMO’s Kelly Prior believes the fund’s “skew to value companies” will prove more of a tailwind than a headwind going forward. Its attractively high yield is achieved by selling derivatives to other investors in order to boost the income produced by the fund. The managers, Ian Lance and John Teahan, are respected by experts. Prior says: “This fund is run with an absolute return mindset, with a focus on cash flow.”

BNY Mellon Global Income
TR 1 year 8.9%, 3 years 32.7%, yield 3.1%

Another fund with performance woes, which Square Mile’s Victoria Hasler expects to be temporary rather than permanent. She notes the fund has paid the price for “relatively cautious positioning, which has led it to lag the benchmark in recent years, as markets have generally been buoyant.” Consumer goods firms are a key area of focus. Hasler backs a change of fortunes, adding: “The fund is likely to see better days in more volatile markets, as it invests in companies that have the ability to pay consistent and sustainable dividends.”

Notes: (SP)TR = (share price) total return. All performance data Morningstar, as at 1 December 2019. *Insufficient track record.

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.

 

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