Where did our clients invest in 2014?

Tilney Bestinvest’s Managing Director Jason Hollands takes a look at the top ten most popular funds for clients using Tilney Bestinvest’s Online Investment Service in 2014:

1. Woodford Equity Income

“Being one of the biggest names in asset management, huge publicity surrounded the launch of Neil Woodford’s new venture, Woodford Investment Management. It has now been six months since the commencement of the CF Woodford Equity launch offer period.

“Over this time, UK Equity Income funds have been the best-selling sector with retail investors according to the IMA and while this has been a choppy period for markets, and the average return on the IMA UK Equity Income Sector has ground out a meagre return of 0.3%, those who placed their faith in Woodford have been well rewarded so far. Indeed the fund ranks first place in what is one of the more crowded sectors and has displayed strong performance since launch.”

2. Threadneedle UK Equity Income

“Equity income funds have remained popular with both income seekers and those looking to benefit from the compounding effect of dividend reinvestment, ever more so during a period when yields have been squeezed on bonds. We rate Richard Colwell and Leigh Harrison highly as managers who generally seek to have a balanced fund and not exhibit the strong sector, style, cyclical or defensive biases that we often see in the UK Equity Income sector. This is a core fund for equity income investors.”

3. Threadneedle European Select

“This fund, managed by Dave Dudding aims to achieve capital growth by investing in a relatively concentrated portfolio of mostly global brands that happen to be domiciled in Continental Europe. Dudding focuses on high quality growth stocks where companies have a competitive advantage or a natural barrier to entry. The earnings of these companies tend to be relatively stable and the fund offers a defensive way of getting core European equity exposure. We believe this is a core European equity fund.”

4. AXA Framlington UK Select Opportunities

“Nigel Thomas has been managing money for three decades and during that time has built one of the strongest track records in the UK All Companies sector. His pragmatic approach to selecting growth opportunities combined with an instinct for value sets him apart. Despite the fund’s now substantial size we believe this approach can continue to add value – though the weight to FTSE 100 companies has increased, the portfolio is still typically overweight mid-cap stocks.”

5. Liontrust Special Situations

“Co-managers Anthony Cross and Julian Fosh have a distinctive strategy of targeting businesses from across the market cap spectrum, but typically the fund has a bias to mid and small caps. The managers have a quality growth investment style, looking for companies with an “Economic Advantage” such as intellectual property that enables them to produce sustained profits growth. This typically leads them to less economically sensitive sectors and away from areas such as banking and mining.”

6. Henderson UK Property

“The fund aims to achieve a high and growing income, together with some capital appreciation, by investing approximately three-quarters of its assets directly in bricks and mortar property with the balance in cash and UK listed property company shares. The portfolio consists of 77 quality properties, with low voids and long leases and three-quarters of the portfolio is invested in the South East. It has around 20% in cash which gives it the flexibility to invest quickly and to meet redemption requests, but could also be a drag on performance and dividends. This fund will be merging with the Old Mutual Property fund, which completes in early 2015.”

7. Standard Life Global Absolute Return Strategies

“This goliath of a fund is in practice an umbrella for around 30 underlying individual strategies managed by a large and well-resourced team. The overall goal of the product is to seek to generate a positive return above cash over the medium term and irrespective of market conditions. The mandate is well diversified with no single strategy dominating the portfolio.”

8. M&G Optimal Income

“This is a flexible strategic bond fund that can invest across the full fixed income spectrum including government bonds, corporate bonds and high yield. It has a focus on overall return rather than a specific yield target. The fund may also use derivatives to help manage risk. This is Richard Woolnough’s most flexible mandate and makes extensive use of derivatives, so it should be considered more aggressive than his other funds, M&G Strategic Corporate Bond and M&G Corporate Bond. A manager with a strong track record across all market conditions and fixed income mandates, combined with the resources of the M&G Group, make this a powerful investment proposition.”

9. PFS TwentyFour Dynamic Bond

“TwentyFour is a relatively new London-based, fixed income boutique. The senior partners of the firm have an average of 20 years’ experience in bond markets.

“The fund aims to provide an attractive level of income and compared to similar funds, it has a more focused best ideas mandate, investing in bonds issued by Pan European companies. The small size of the PFS TwentyFour Dynamic fund enables the team to exploit investment opportunities and adopt a more active approach to portfolio management compared to many of its peers.”

10. Kames Strategic Bond

“Whilst the fund is managed from their Edinburgh office, Kames adopt a global approach to fixed income investing incorporating the world's main credit and sovereign bond markets. Kames offer a strong suite of fixed income products; this is essentially their best ideas fund, drawing on the expectations of their fixed income product leaders. Relative to other peer group funds this is a smaller, more focused and conservative offering, investing across more mainstream fixed income securities.”

-Ends-

Important information:The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This press release does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance.

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.

Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Please note that historical or current yields should not be considered reliable indicators of future performance.

The property market can be illiquid; consequently, there can be times when investors will be unable to sell their holdings. Property valuations are subjective and a matter of judgement.

Press contacts:

Roisin Hynes
0207 189 2403
07966 843 699
Roisin.hynes@tilneybestinvest.co.uk

Matthew Gray
0207 189 2492
Matthew.gray@tilneybestinvest.co.uk

About Tilney Bestinvest

Tilney Bestinvest is a leading investment and financial planning firm that builds on a heritage of more than 150 years. We look after more than £9 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including UK Wealth Manager of the Year, Low-cost SIPP Provider of the Year and Self-select ISA Provider of the Year 2013, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Bestinvest employs almost 400 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.

The Tilney Bestinvest Group of Companies comprises the firms Bestinvest (Brokers) Ltd (Reg. No. 2830297), Tilney Investment Management (Reg. No. 02010520), Bestinvest (Consultants) Ltd (Reg. No. 1550116) and HW Financial Services Ltd (Reg. No. 02030706) all of which are authorised and regulated by the Financial Conduct Authority. Registered office: 6 Chesterfield Gardens, Mayfair, W1J 5BQ.

For further information, please visit: www.tilneybestinvest.co.uk