3 magnificent funds for an ISA that aren’t Fundsmith or Lindsell Train
Fundsmith Equity and Lindsell Train Global Equity are popular with UK investors. And for good reason. Over the long term, these investment funds have delivered attractive returns.
However, on platforms such as Hargreaves Lansdown and AJ Bell, there are plenty of other funds that are worth a look. With that in mind, here are three strong performers that could be a good fit for an ISA (and could help investors diversify their portfolios).
Blue Whale Growth
First up is Blue Whale Growth. This is a growth-focused global equity fund managed by Stephen Yiu and currently has around £850m in assets under management.
I see this product as a good choice for growth investors as Yiu has a strong track record when it comes to identifying, and capitalising on, powerful growth themes.
For example, he has recently made big bets on companies exposed to the artificial intelligence (AI) boom, such as Nvidia and ASML. And this has paid off. Over the last year, Nvidia has risen about 160%.
The downside to this fund is that it can be volatile. Last year, for instance, it returned -27.6% as tech stocks crashed.
However, over five years, it has delivered a return of about 50%, which is an impressive performance.
Stonehage Fleming Global Best Ideas
Next we have Stonehage Fleming Global Best Ideas, which is wealth manager Stonehage Fleming’s flagship investment fund. Run by portfolio manager Gerrit Smit, it currently has around £2.3bn in assets under management.
I think this fund could be a good choice for ‘quality’ investors as, like Fundsmith and Lindsell Train, it has a focus on high-quality businesses. Its aim is to invest in companies with strategic advantages that trade at attractive valuations.
I really like the portfolio here. Within the top-10 holdings there are well-known names such as Alphabet and Microsoft. However, there are also some more under-the-radar companies such as electronic systems software group Cadence Design Systems (which is benefitting from the AI boom) and pet health specialist Zoetis.
It’s worth noting that this fund is concentrated in nature (it only holds 20-30 stocks). This adds risk.
Long term performance has been excellent however. Over the last five years, it has returned about 52%.
Royal London Global Equity Select
Finally, I want to highlight Royal London Global Equity Select. This is a lesser-known fund with a focus on quality and valuation that has assets under management of about £790m. Launched in 2017, it’s managed by a team of investors that has been working together for around 20 years.
I think this product could be a good choice for those looking for something a little different. While it has a similar approach to the likes of Fundsmith and Lindsell Train, its holdings aren’t the same.
For example, the fund is invested in pharma giant Eli Lilly, which has done really well recently on the back of demand for diabetes drugs and interest in its obesity-linked products.
This fund’s track record is certainly impressive. Over a five-year horizon, it has returned about 95%.
Past performance isn’t a guide to future returns, of course. However, given this historical performance, I think it’s worth a closer look.
| Fund | 1-year return | 3-year return | 5-year return |
| Blue Whale Growth | 9% | 9% | 50% |
| Stonehage Fleming Global Best Ideas | 0% | 13% | 52% |
| Royal London Global Equity Select | 12% | 68% | 95% |
| Fundsmith Equity | 4% | 20% | 53% |
| Lindsell Train Global Equity | 0% | 7% | 26% |
The post 3 magnificent funds for an ISA that aren’t Fundsmith or Lindsell Train appeared first on The Motley Fool UK.
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Edward Sheldon has positions in Alphabet, Microsoft, ASML, Hargreaves Lansdown Plc, Nvidia, Fundsmith Equity and Blue Whale Growth. The Motley Fool UK has recommended Alphabet, Microsoft, ASML, Cadence Design Systems, Hargreaves Lansdown Plc, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
