We asked some of our freelance writers to reveal their top-rated investment funds for April.
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Baillie Gifford Japan Trust
What it does: Baillie Gifford Japan Trust focuses on achieving long-term capital growth primarily by investing in smaller to medium-sized Japanese companies.
By Mark Tovey. I plan to buy shares in Baillie Gifford Japan Trust (LSE:BGFD). That’s because the Bank of Japan, after 20 years of keeping interest rates at zero, is expected to change direction as a new governor takes charge in April. That should cause the yen to strengthen against other currencies, giving Japanese consumers more purchasing power.
The yen has already begun to stage a comeback, rising 16% this year above its low of 2022.
Of course, a stronger yen could throw cold water over the profitability of some Japanese exporters, like Canon and Toyota.
But I’m not too worried about that risk, because Japanese companies have increasingly outsourced production overseas in the last two decades. While 15% of manufacturers made their products abroad at the turn of the millennium, that number has now almost doubled to 25%.
In short, the yen could be about to stage a bull run, raising up Japanese consumers and producers that have outsourced operations.
Mark Tovey does not own shares in Baillie Gifford Japan Trust, Toyota or Canon.
CT European Select
What it does: CT European Select Fund invests in European stocks. Its aim is to achieve above-average capital growth.
By Edward Sheldon, CFA. Europe is home to some world-class companies and I see the CT European Select Fund as a good way to get exposure.
There are a number of things I like about this particular fund. One is that it has a focus on higher quality companies that have the potential to grow their profits steadily year on year.
Another is the performance track record. Over the last five years, this fund has returned about 50%. That’s a very respectable performance and a much higher return than the FTSE 100 has generated.
Finally, I like the fact that fees through Hargreaves Lansdown are just 0.65% per year. That’s quite low for an actively managed fund.
One risk to be aware of is that the fund is relatively concentrated. This means that stock-specific risk is higher than average.
Overall, however, I think this fund has a lot of appeal.
Edward Sheldon has positions in the CT European Select Fund and Hargreaves Lansdown.
iShares Gold Producers UCITS ETF
What it does: iShares Gold Producers UCITS ETF gives investors exposure to a wide range of gold mining companies.
By Royston Wild. Gold’s recent burst back above $2,000 per ounce suggests now could be a good time to gain exposure to the safe-haven metal. Further gains could be in store with this critical technical level taken out, and macroeconomic and geopolitical uncertainty dragging on.
One way individuals can do this is by investing in the iShares Gold Producers UCITS ETF (LSE:SPGP). This exchange-traded fund has more than $1.7bn locked up in around 60 gold mining companies.
The fund is highly geared towards Canadian-domiciled businesses, though it also has large holdings in Australian, US and South African miners. Some of its key holdings include Barrick Gold, Newmont and Franco-Nevada.
The beauty of investing in this ETF is that, unlike ones that simply track the gold price, this particular investment vehicle pays dividends. These are then automatically reinvested back into the fund at no extra cost.
Royston Wild does not have a position in iShares Gold Producers UCITS ETF, Barrick Gold, Newmont or Franco-Nevada.
LF Blue Whale Growth Fund
What it does: LF Blue Whale Growth Fund invests in stocks that have the ability to grow and improve profitability over the long term.
By Paul Summers: ‘Growth’ is something of a dirty word right now. With interest rates still climbing, many investors are focusing on the short term and buying shares in more established (but not necessarily good) companies. I’m inclined to do the opposite.
The LF Blue Whale Growth Fund invests in a concentrated portfolio of high-quality, blue-chip stocks that have solid futures. We’re talking about those with valuations over £100bn, not market tiddlers.
According to its latest fact sheet, the fund has delivered just over 10% annualised since its launch in 2017. Although past performance is no guide to the future (and fees need to be taken into account), that’s higher than the 7.9% average achieved across similar funds. It’s also after a period of poor performance, likely due to almost half the portfolio being invested in tech companies.
When sentiment reverses (and I’m very confident it will), I want to be ready.
Paul Summers has positions in LF Blue Whale Growth Fund.
The L&G Cyber Security ETF
What it does: The L&G Cyber Security ETF tracks a basket of companies active in the cybersecurity industry.
By Ben McPoland.Hardly a week goes by without another major hacking incident. And it’s likely to get worse, as cybercrime is expected to cost the world around $10.5trn annually by 2025. This means cybersecurity is becoming an absolute necessity for all companies, organisations and governments.
I think L&G Cyber Security ETF (LSE:ISPY) is an excellent vehicle to ride this long-term megatrend. This exchange-traded fund (ETF) from Legal & General contains 43 stocks. The top holdings are Palo Alto Networks, Cloudflare and Fortinet.
Cybersecurity threats are constantly changing as the technologies that hackers use get ever more sophisticated. And artificial intelligence is set to up the ante in this never-ending game of cat and mouse. This fund provides broad exposure to the whole industry.
I should note that it carries a 0.69% ongoing charge, which isn’t as cheap as some ETFs. That said, I do consider it a price worth paying to capture the outsized growth potential of the cybersecurity sector. The fund is up 150% since launching in 2015.
Ben McPoland own shares in L&G Cyber Security ETF and Legal & General.
Scottish Mortgage Investment Trust
What it does: Scottish Mortgage is a tech-heavy investment fund with investments worldwide including Tencent, ASML, Alibaba, Amazon and NIO.
By John Fieldsend, I’m not usually the biggest fan of investment funds. Those fees for managing the fund, sometimes as high as 2%, really eat into any returns I’d get. So the first thing I like about Scottish Mortgage (LSE: SMT) is low fees of only 0.23%
The next thing is a stellar track record. Between 1993 and 2020, the fund returned roughly 1,500% for investors. In comparison, the S&P 500 – which also contains many large tech companies – returned around 700% over the same period.
The icing on the cake for me is the nature of the fund’s portfolio. With around 30% in private equity and large positions in foreign-owned companies that I’d find difficult to research like Tencent or ASML, I feel an investment in Scottish Mortgage gives me exposure and diversification I wouldn’t otherwise get.
All these reasons put together are why I took the plunge and picked up some shares recently.
John Fieldsend own shares in Scottish Mortgage.
Seraphim Space Investment Trust
What it does: Seraphim Space Investment Trust is the world’s first publicly listed fund that focuses on space tech.
By John Choong: Seraphim Space Investment Trust (LSE:SSIT) is a fund that invests in early-stage companies that focus on developing space technologies. These investments are made with the intention to dominate the space tech market through being market leaders within industries such as climate, communications, mobility, and even cybersecurity.
Currently, the launch market is seeing a deficit in supply for the first time in decades. This is because there’s been an uptick in the use cases for satellites and other space-related technologies. As such, with investments in companies such as Rocket Lab, Airbus, and Blue Origin, Seraphim is one such fund to capitalise on the increase in demand for space products.
Given that the trust is currently trading at a 60% discount from its IPO price, it wouldn’t be unreasonable to argue that its shares are worth investors buying now for long-term potential. After all, its current share price is 50% lower than its net asset value (NAV) per share.
John Choong has no position in any of the shares mentioned.
This post was originally published on Motley Fool
