Portfolio manager at Ravenscroft Chris Bell selects his five top fund picks for the second half of 2021.
1. Polar Capital UK Value Opportunities
“In a world of stretched valuations, asset allocators have already beefed up their exposure to the ‘value oriented’ UK equity market.
The Polar Capital UK Value Opportunities fund should continue to do well as the domestic economy recovers and the fund benefits from an approximately 70% exposure to small- and mid-cap companies. There has been a growing trend of corporate takeovers and we respect the talented duo of managers who have been in place for over four years.”
The £1.6bn AUM fund has returned 43.4% and 17.25% over one and three years respectively, according to FE fundinfo. Peers in the IA UK All Companies sector have averaged 33.3% and 14.6% over the same periods respectively.
2. Fidelity Global Dividend
“If global equity markets start to lose the positive momentum as the year progresses, investors will want managers who are prudent and focused on the total return aspect.
“The Fidelity Global Dividend fund fits this bill and provides exposure to relatively defensive global blue chips that also pay above average dividends.
“Sector overweight positions include consumer staples, healthcare, and insurance but exposure in the technology sector is via more cyclical plays such as Intel.”
The £2.1bn AUM fund has returned 13.5%, 33.7% and 53.8% over one, three and five years respectively. Peers in the IA Global Equity Income sector have averaged 23.3%, 25.2% and 51.6% over the same time periods respectively.
3. Sanlam Artificial Intelligence
“Focusing on long-term themes is also something we are passionate about and the Sanlam Artificial Intelligence fund has just passed its fourth birthday, giving investors exposure to this powerful technological trend. It is also interesting that the managers also utilise an AI-driven screening technique as part of the investment process.
“There are some obvious technology heavyweights in the portfolio but there is also 25% invested in healthcare and industrials and an appealing 11% exposure to the emerging markets.”
Chris Ford and Tim Day’s fund has returned 97.4% over three years, compared to a 91.3% return for its MSCI World IT benchmark.
4. Brown Advisory Latin American
“Within emerging markets it is fair to say that Latin America has been hardest hit by COVID-19, with equity markets under negative pressure.
“If you believe the worst is past, the Brown Advisory Latin American fund looks very interesting, with close to 85% invested in Brazil.
“The fund managers believe the current portfolio is of the highest quality and should be capable of delivering compound EPS growth of 20% per annum for the next five years.”
Brown Advisory Latin American has lost 30.2% and 26.9% over one and three years, respectively. Its benchmark FTSE Emerging Latin America index has gained 19.9% over five years.
5. Stewart Investors Asia Pacific Leaders Sustainability
“Finally, we continue to like the long-term dynamics of Asia and are firm supporters of Stewart Investors with the Asia Pacific Leaders Sustainability fund.
“The fund invests in companies with a market value of at least $1bn, the emphasis on quality and contribute to the sustainable development of the countries they operate in. The fund currently has close to 50% invested in healthcare and technology, with emphasis on India rather than China.”
The £7.3bn AUM fund has returned 25.1%, 36.4% and 62.5% over one, three and five years, respectively. Its benchmark MSCI AC Asia Pacific ex-Japan index is up 62.5% over five years.
Chris Bell is a portfolio manager at Ravenscroft