6 'Steady Eddies' for a stress-free retirement

However, I’m still keen on above-average performance. That’s because I want to enjoy the first decade or so of my retirement when I finally get there. And for it to see me through - which, hopefully, is going to require a decent level of income. I’m not ready to de-risk completely.

So, when I’m thinking about the core funds to sit at the heart of my retirement draw-down portfolio, I need to tick the following boxes:

• I’d like to be able to double my fund over 10 years - that means an annual average return of at least 7.2%. The past is no guarantee of the future in investment, but it is a guide.
• I don’t want too much volatility. A smooth ride will help me stay the course, but I recognise that the price for performance could be some short-term ups and downs.
• I want a degree of diversification - global funds are an easy way to achieve this so these are a big part of the portfolio.

Some of these funds will be familiar to you if you have followed my recent fund selection articles. I make no apology for this repetition - there is a limited number of good funds that I am prepared to entrust with my retirement savings.

• Read: Ten for 10: Funds to buy and hold for a decade
• Read: My fund picks for 2025

I am also conscious that three of the six funds are managed by Fidelity. Again, no apology for this. I have worked here for 17 years and know these funds, and their managers, well. That’s reassuring.

So here are my Six Steady Eddies to see me through the start of my retirement.

Rathbone Global Opportunities

This fund, managed by James Thomson, has been a staple of my portfolio for many years since I first recommended it as part of my annual fund picks in 2016, and again the following year. It has performed well, although there is no guarantee that it will continue to do so, and there have been some tricky periods along the way.

This is a fairly concentrated fund which seeks to invest in future winners that will grow faster than the broader market. Because of this ‘growth’ bias, the investments in the fund can be more expensive than average and this introduces some risk and the potential for volatility. In 2022, for example, the fund endured a meaningful setback. But James likes to own companies with proven business models. He recognises that with such a concentrated portfolio (40-60 companies) he can’t gamble on outcomes.

• Learn more about Rathbone Global Opportunities

Fidelity Global Dividend

This is another long-term holding in my personal portfolio. Dan Roberts has been running the fund since 2012, and I have been an investor pretty much from the outset. Dan has delivered strong performance despite an underweight to the US, which has been the best-performing market through that period. He has a low-turnover, high-conviction style. That might be expected to lead to volatility, but it has been a relatively smooth ride.

Dan’s approach is focused on valuation and visibility. He looks for companies with high and growing levels of cashflow. He favours a margin of safety and the ability for stocks to enjoy a re-rating. He also seeks to find companies with transparent business models and financial statements, where he can be confident of persistent returns. There is a bias towards Europe, which provides balance with some of the other holdings in this list.

• Learn more about Fidelity Global Dividend

Dodge & Cox Worldwide Global Stock

The investment approach of this global fund is to perform detailed, original research and to build a portfolio based on the conviction that comes from that work. The company has substantial research resources, the management team is experienced, and they have worked together a long time. That’s important when building a high conviction fund with long holding periods.

The fund is a value fund - it prefers to invest in a fair company at a good price rather than a good company at a fair price. But it is pragmatic, so it will own a growth stock if it can buy it at a cheap price alongside more traditional contrarian value stocks.

• Learn more about Dodge & Cox Worldwide Global Stock

Fidelity Special Situations

If markets rotate not just out of the biggest US stocks but out of the US market more generally, it may be because investors decide that the gap between valuations on Wall Street and in the rest of the world has become too wide. The UK stock market is one of the most extreme examples of this divergence with shares in London trading at little more than half the multiple of earnings enjoyed by those in New York.

There are some good reasons why the UK should be out of favour, notably the relatively poor productivity of the UK economy. But it’s worth noting that the UK stock market should not be seen as a proxy for the UK economy. Many great UK companies earn a high proportion of their earnings overseas.

A well-managed, active fund like Alex Wright’s Special Situations could be a good way of tapping into the UK’s valuation advantage. Alex is a seasoned investor, and he has been running this fund for a long time. He benefits from a big pool of researchers and adopts a contrarian approach which suits his temperament and has been honed over a few market cycles.

• Learn more about Fidelity Special Situations

Lazard Emerging Markets

Despite the remarkable resilience of the US economy, it would be strange to have a long-term view of the world that ignored the potential of emerging markets which are likely to grow at a higher rate than the developed world.

This fund is managed by a long-standing manager, James Donald, supported by an experienced team. His investment process is strong, with a methodical approach to portfolio construction and risk management.

He looks to buy good quality companies at reasonable discounts, and where there is a line of sight to improving fundamentals. The fund has stuck to these principles, owning companies that are cheaper than the market but with better fundamental prospects.

• Learn more about Lazard Emerging Markets

Fidelity Global Technology

The one thing we can guarantee about the world is changing. Nothing is certain, but what seems very likely is that technology will continue to evolve rapidly and will be an increasingly important part of our lives. A medium to long term investment strategy that ignores the potential of technology would be unusual.

The Fidelity Global Technology Fund has around 100 investments, selected using a bottom-up approach designed to identify high-quality companies with sustainable growth prospects that are trading at attractive valuations. The manager, Hyun Ho Sohn, looks for: growth companies focused on innovations or disruptive technologies; cyclical opportunities with strong market positions; or special situations that are mispriced with recovery potential.

• Learn more about Fidelity Global Technology

If you’ve got a burning question you want to ask, why not drop us a line? Ask us your question.

• Read: Invest in 'longevity dividend'
• Read: How 4% inflation could derail your retirement
• Read: 6 ways to fix your finances for the 100-year life