Buyers talk to Investment Week about the funds they are backing for the second half of 2018, products that are the standout strategies and the managers they are putting their faith in.
The first half of 2018 saw markets suffer from bouts of volatility shaken by the near-constant threat of a trade war, multi-speed central bank policies and continuing uncertainty surrounding the Brexit negotiations.
Unsurprisingly, asset allocators are maintaining a defensive stance going into the second half of the year, with capital preservation strategies and absolute return funds on their favoured lists.
Value-oriented funds have also come to the fore as investors question the momentum of the growth rally, while select emerging markets funds featured despite the recent sell-off on trade war fears and US dollar strength.
Here, selectors reveal their top selections for the second half of 2018 and beyond.
Ben Willis, head of portfolio management at Chase de Vere
The Schroder Income fund combines two attributes that we are currently favouring in our UK equity exposure - UK dividends and value. Managers Nick Kirrage and Kevin Murphy pay close attention to the price they pay at entry, assessing and analysing what the dividend-paying company's worth is currently, compared to what they believe it may be at a future point.
Meanwhile, if you require exposure to investment grade debt, the TwentyFour Corporate Bond fund is an excellent choice. What puts this fund above its peers is the pedigree and expertise of the management team.
Led by Chris Bowie, the team combines top-down analysis of bond markets using their proprietary system with fundamental credit risk analysis. This has seen the fund deliver excellent, relative risk-adjusted returns.
Ryan Hughes, head of active portfolios at AJ Bell Investments
Having launched the active managed portfolio service (MPS) in February right into a strong momentum rally, we wondered if we should build them to catch the tail end of that momentum or in a much more diversified sense.
We did the latter, which means some holdings are quite defensive, like Troy Trojan Income, and focused on the preservation of capital. They will come into their own in periods like the last couple of weeks when we saw a fall in the market. Trying to capture momentum then would have been dangerous.
In addition, the Dodge & Cox Worldwide US Stock fund has a slight value tilt, and looking away from the expensive areas in markets, it could do quite well.
If I look at emerging markets, they are having trouble, but we own Jupiter Global Emerging Markets, run by Ross Teverson, who is happy to go off benchmark and can bring diversification.
What could be very beneficial is having exposure to absolute return strategies, such as Janus Henderson UK Absolute Return and M&G Absolute Return Bond, which are very defensively positioned. We have not really made changes since we launched in February.
On the fixed interest side, Ian Spreadbury's Fidelity Moneybuilder Income is likely to be on the defensive side with exposure to gilts.
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