Don’t let this year’s ISA allowance get away
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By Tom Stevenson, Investment Director, Fidelity Personal Investing
Important Information: The value of investments and the income from them can go down as well as up so you may get back less than you invest. Please note that Tom’s picks are not a personal recommendation for you. If you’re unsure about the suitability of these funds for your personal circumstances, you should speak to an authorised financial adviser. Past performance is not a reliable indicator of future returns.
Every year, I highlight a few funds that I feel are particularly interesting investment options in line with my general view of the market. These are funds I like the look of, which might be worth considering for your ISA this year, but it’s important to keep in mind they're not a personal recommendation.
Last year, I timed my article particularly well, as it was published one day after the market hit bottom. Perhaps unsurprisingly, it was a very good year for my picks in 20191. I was more nervous about the outlook for 2020 and subsequent events have shown I was right to be so. The coronavirus outbreak, and the drastic measures taken to contain it, have turned many of our earlier expectations for economic and company profit growth on their heads.
Reviewing my new year picks three months into the year, however, I am happy to stick with them. Two of the funds were chosen for their defensive qualities, which still stand, while the other two are in markets which I expect to recover, and which were attractively valued even before this year’s correction.
So here are my four fund picks for 2020:
Investing when markets are as volatile as they have been requires nerve and confidence that history will repeat itself so that markets bounce back in due course from the latest correction. That history, however, shows that investing through the inevitable ups and downs is the best way to capture the stock market’s returns in the long-run. I’m relaxed about putting my own ISA contributions into these four well-managed funds.
Tax treatment depends on individual circumstances and all tax rules may change in the future. Investors should note that the views expressed may no longer be current and may have already been acted upon. Select 50 is not a personal recommendation to buy funds. Equally, if a fund you own is not on Select 50, we're not recommending you sell it. You must ensure that any fund you choose to invest in is suitable for your own personal circumstances.
All these funds invest in overseas markets to a varying degree, so the value of investments could be affected by changes in currency exchange rates depending on the exposure each fund has to those markets.
The Fidelity Select 50 Balanced fund, the Fidelity Global Dividend fund and the Liontrust UK Growth fund use currency hedging. Currency hedging is used to substantially reduce the effect of currency exchange rate fluctuations on undesired currency exposures. There can be no assurance that the currency hedging employed will be successful. Hedging also has the effect of limiting the potential for currency gains to be made. All the funds use financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations.
The Fidelity Select 50 Balanced Fund can invest between 20-60% in bond assets. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investments to fall. The Fidelity Select 50 Balanced fund investment policy means it invests mainly in units in collective investment schemes. The Artemis Global Emerging Markets Fund invests in emerging markets which can be more volatile than more developed markets.
The Key Information Document (KID) for Fidelity and non-Fidelity funds is available in English and can be obtained from our website at www.fidelityinternational.com.
For more information about these funds, including the factsheets, or to invest.
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Our experts research thousands of funds a year. Select 50 is a list of their favourites.
1 Performance of last year's four fund selections, and additional 2020 selections.
|Fund name||% return|
|Fidelity Select 50 Balanced Fund||n/a||n/a||n/a||0.3||4.9|
|Fidelity Global Dividend Fund||8.9||23.2||-0.3||9.4||9.5|
|Lindsell Train UK Equity Fund||2.4||18.4||11.0||7.3||5.0|
|Baillie Gifford Japanese Fund||-2.4||46.9||19.2||-7.8||0.9|
|Liontrust UK Growth Fund||-0.6||26.0||5.0||3.0||1.8|
|Artemis Global Emerging Markets Fund||n/a||48.2||20.5||-5.9||-2.4|
Source: Morningstar Direct March 2020. Performance basis: bid-bid, income reinvested in GBP, net of fees.
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