Our World Cup investment dream team

The World Cup is now just days away and many people are feeling optimistic. But regardless of how your team performs, your investments can still be top scorers.

As any football fan knows, how far your team will get in a tournament depends on individual talent, team work and good management. We believe putting together an investment portfolio is no different. You need expert fund managers who can defend your wealth when the outlook is no longer rosy as well as those who are able to spot opportunities and deliver high-scoring returns. So we have assembled a global dream team to create a world class squad for long-term investors.

Centre forwards

These players each have their own distinctive styles. There are two developed market funds, Lindsell Train Global Equity and Artemis Global Income. While the former typically backs larger, well-known, quality growth companies, the latter is more sensitive to valuations paid. In the centre is a striker fund focused on high-growth developing markets.

Lindsell Train Global Equity

Michael Lindsell and Nick Train take large positions in a small number of high-quality businesses, such as PayPal, Diageo and Nintendo, and hold them for the long term. The quality and stability of these businesses mean this does not necessarily increase risk, and their funds have typically offered a degree of protection in falling markets. Both portfolios and performance have little in common with the index and they have often lagged rising markets, but over time they have outperformed.

Fidelity Emerging Markets

Nick Price is an experienced emerging markets equities manager. He has been running this fund since 2010 and favours companies with strong market positions and competitive advantages. These are able to deliver attractive earnings and have enabled the fund to deliver a more defensive performance profile. Key holdings include Samsung, Glencore and Alibaba.

Artemis Global Income

Run by Jacob de Tusch-Lec, the fund has a ‘go anywhere’, unconstrained approach to investing in developed markets. It currently has far less exposure to the expensive US stock market than global funds which stay close to the index and has a high weighting of medium-sized companies. Jacob de Tusch-Lec has a dynamic investment approach meaning he is able to adjust the portfolio to suit all market conditions. The flexible approach allows the manager to achieve a balance of dividend growth and the potential for capital appreciation.

Midfielders

In the midfield we have four funds, each focused on major stock market region.

Dodge & Cox Worldwide US Stock Fund

This fund is dominated by major blue chip US companies, such as Microsoft, Wells Fargo and 21st Century Fox. Identifying companies that the managers believe are undervalued is a key part of the approach, which we think is the right strategy at a time when overall US stock market valuations are expensive on a range of measures. The fund will not invest in utilities, biotechnology or new media companies so will miss out when any of these sectors are doing well, but we expect this fund to prove defensive in tougher times. The managers have close relationships with investee companies and their CEOs, with whom they actively engage to enact shareholder-beneficial changes.

Jupiter European

Alexander Darwall is a high-conviction manager with a distinct investment style – he has built a formidable track record since taking over this fund in 2001. His portfolios have little in common with the benchmark, with Darwall instead focusing on identifying high-quality European companies such as Deutsche Borse, Novo Nordisk and RELX.

Baillie Gifford Japanese

The fund aims to achieve sustainable capital growth through investment in large and mid-cap Japanese equities. It has a team-based approach, but is led by Sarah Whitley. They use a bottom-up, growth-orientated style to invest in companies with strong financials, a positive industry background that they have a competitive advantage in and favourable attitudes towards shareholders, examples being Toyota, FANUC and Misumi.

Schroder Asian Alpha Plus

Manager Matthew Dobbs has an unconstrained mandate.  He is supported by a sizeable team of analysts and other managers in the region. The fund invests in a portfolio of 50-70 companies with a focus on those with positive cash flow, balance sheet strength and valuation support. The fund has an overweight exposure to China and Hong Kong; 30% to China, 20.5% to Hong Kong, and is underweight relative to the index to South Korea and Singapore; 13.7% to South Korea and 2.3% to Singapore.

Defenders

Our defence is where we have placed funds investing in UK-listed companies. There is less currency risk, the UK is relatively inexpensive compared to other developed markets at the moment and the UK market remains a leader for dividends.

Evenlode Income

Manager Hugh Yarrow invests in a concentrated portfolio of mostly UK companies, as well as selected US and European large-caps. His investment style focuses on quality, asset-light companies, with a degree of resilience in falling markets. The fund has a bias to sectors such as consumer goods and healthcare and avoids industries such as mining which require heavy investment in assets such as plant and machinery.

Liontrust Special Situations

Managed by Julian Fosh and Anthony Cross, the fund has managed to achieve both significant and consistent outperformance over the long term, but with less volatility than the UK market. The fund looks for companies able to sustain a higher than average level of profitability for longer than expected. The companies the fund invests in have distinct characteristics, such as ownership of intellectual property, strong distribution channels or significant recurring revenue streams, whether they are large, medium or smaller companies.

JO Hambro CM UK Equity Income

The investment process, which incorporates a strict yield requirement for portfolio holdings, was developed by fund managers James Lowen and Clive Beagles. Stock selection also incorporates long-term investment trends identified by the managers and used to focus research. This disciplined approach has outperformed consistently.

Goalkeeper

In goal we have a targeted absolute return fund designed to deliver steady Eddy returns with low volatility.

Invesco Perpetual Global Targeted Returns

The fund has 25-30 individual investment strategies, covering equities, bonds and currencies. The aim is positive returns in all market environments on a rolling basis, delivering 5% above interest rates, but with low capital volatility. To achieve this, the investment team uses a wide number of investment techniques which are intended to provide small, incremental returns to generate the positive overall return with less than half the volatility of global equities.

 

Important information

Please note the value of investments can go down as well as up and you may get back less than you originally invested.

Past performance or any yields quoted should not be considered reliable indicators of future returns. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.

Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing.

Shares in smaller companies can be more volatile and less liquid than those in larger companies, so funds investing in smaller companies can carry more risk.

Underlying investments in emerging markets are generally less well regulated than the UK. There is an increased chance of political and economic instability with less reliable custody, dealing and settlement arrangements. These markets can be less liquid. If a fund investing in markets is affected by currency exchange rates, the investment could either increase or decrease. These investments therefore carry more risk.

Targeted absolute return funds do not guarantee a positive return and you could get back less than you invested, much like any other investment. Additionally, the underlying assets of targeted absolute return funds generally use complex hedging techniques through the use of derivative products.