2013 Fund ISA Selection

2013 Fund ISA Selection

19 March 2013 / by Oliver Roylance-Smith

With the ISA deadline fast approaching, taking advantage of this valuable tax break should be at the top of every investor’s list of priorities. To help, we have put together our selection from the 1,500+ funds available from the Fair Investment Fund Supermarket.

Independent ratings from OBSR

Morningstar OBSR is an independent consultancy specialising in investment analysis. Their fund ratings are based on a proven research process that takes into account the multiple factors vital to a fund’s success. The research combines qualitative analysis (i.e. the quality of the management team and the fund selection process) with quantitative analysis (i.e. the fund’s past performance).

The top three ratings – Gold, Silver and Bronze – indicate that the fund is highly regarded by OBSR analysts. The very highest ratings are given to funds which, in the analysts’ opinion, have the strongest ability to outperform its benchmark and peers through time, within the context of the risks taken – the stronger the conviction that this will happen, the higher the rating. All of the funds detailed below are rated at least ‘Silver’.

INCOME

Obtaining a high yield from your investment is a popular requirement, so the main criteria for this selection include a strong history of competitive yields along with regular payment dates.

UK Equity

The Artemis Income Fund aims to provide an increasing income and capital growth from investing mainly in ordinary shares, preference shares, convertible bonds and fixed-interest securities in the UK. The fund has a Gold rating from OBSR and offers twice-yearly income payments, with a current gross yield of 5%.

The Invesco Perpetual Income Fund has a current gross yield of 4.1% and, again, holds a Gold rating from OBSR. The Fund aims to achieve a reasonable level of income, together with capital growth. The fund intends to invest primarily in companies listed in the UK, with the balance invested internationally. Income is paid twice yearly, in March and September. 

If you’re looking for more frequent income while maintaining a UK focus, the Jupiter Merlin Income Portfolio offers quarterly income payment from a diverse range of holdings that include 31.5% UK equities. With a current gross yield of 3.5%, the fund also benefits from an OBSR Gold rating. 

Global Equity

The Silver-rated Newton Global Higher Income Fund aims to provide increasing income and capital growth over the long term by investing in equities, and similar investments, on a global scale. Income is paid on a quarterly basis and the current yield stands at 4.7% (gross).

Emerging Markets

For those looking to take advantage of the opportunities offered by emerging markets, the Newton Asian Income Fund offers the opportunity to chase long-term capital growth while achieving income – currently, the fund yields 5.3% (gross). The investment portfolio is largely based in securities in the Asia-Pacific region, with the reassurance of a Silver rating from OBSR.

Bonds

Our income bond selection includes the Gold-rated Invesco Perpetual Monthly Income Fund, which aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. Income is paid on a monthly basis, and the income yield currently stands at 6.1% (gross)

The M&G Optimal Income Fund offers twice-yearly payments via investments across a broad range of income assets, with at least 50% investment in debt instruments. The fund has a Silver OBSR rating and, with a current gross yield of 3.6%, aims to provide a total return to investors based on exposure to optimal income streams in investment markets.


Select Range – 0% initial charge

All of the above income funds are featured from our Select Range and as such are available via the Fair Investment Fund Supermarket at 0% initial charge. You can also take advantage of your ISA allowance for both the current and next tax year as well as transfer any existing holdings.


GROWTH

With over 1,500 funds from over 90 investment managers, the Fair Investment Fund Supermarket offers a vast choice when considering which sector to invest in. We give you our selections from some of the most popular investment themes:

UK Equity

Our UK Equity selection is the BlackRock UK Special Situations Fund, which aims to achieve long-term capital growth for investors. The fund showed a return 3% above the sector average in 2011/12, and holds a Gold rating from OBSR. Investment is concentrated on the shares of companies incorporated or listed in the UK with a predominant focus on small or medium sized companies, including those whose future prospects aren’t currently valued highly by the market. 

Global Equity

If you’re looking to invest in a fund with the sole aim of long-term capital growth, you may want to look at the M&G Global Basics Fund. This global equity fund concentrates on companies operating in basic industries, with 27.9% of funds invested in this area. Gold-rated by OBSR, the fund has also outperformed its benchmark consistently since January 2010.

Emerging Markets

First State Global Emerging Market Leaders Fund is also Gold-rated by OBSR. The fund aims to achieve long-term capital growth by investing worldwide in emerging economies, as well as in those companies which are listed on developed market exchanges but whose activities predominantly take place in emerging market countries. With holdings in economies such as Brazil, Taiwan and South Korea, this fund offers portfolio diversification balanced against the potentially higher risks of emerging market investments.

Corporate Bond

Our corporate bond selection is the Invesco Perpetual Corporate Bond, which aims to achieve a high level of overall return, with relative security of capital. Investing mainly in bonds in both the UK and overseas, the fund concentrates investments primarily in fixed interest securities. Gold-rated by OBSR, the fund offers a current income yield of 4.5% (gross).

Ethical

Many investors are increasingly aware of the impact their investment choices can have on the world around them, and are turning to ethical investments funds to meet these requirements. The Kames Capital Ethical Equity Fund has a Silver rating from OBSR, and has a primary investment objective of maximum growth via investment in mostly UK-based companies, with a cumulative return over the past 5 years of 33.91%. Investment targets are chosen according the fund’s predefined ethical criteria, which screens companies for involvement in areas such as gambling, alcohol, and tobacco production.

Commodities

The Blackrock Gold and General Fund aims to achieve long term capital growth by investing in gold mining and precious metal-related shares. This is a Gold-rated, specialist unit trust which aims to achieve long term capital growth by investing in gold mining and precious metal-related shares. It tends to be volatile – the percentile rank alone has ranged from 7 to 99 since 2008 - and is therefore most suitable as a diversification fund within the remit of a larger portfolio, rather than as a stand-alone investment.

UK Smaller Companies

The Artemis UK Smaller Companies Fund aims to achieve long-term capital growth via investments in smaller and medium-sized UK firms. The fund is mainly be invested in smaller companies that are listed, quoted or traded in the UK, and in smaller companies which have headquarters in the UK or carry out a significant part of their activities in the UK. The fund is Gold-rated by OBSR.

Select Range – 0% initial charge

All of the growth funds detailed above are taken from our Select Range and as such are available via the Fair Investment Fund Supermarket at 0% initial charge. You can also take advantage of your ISA allowance for both the current and next tax year as well as transfer any existing holdings.

Important Reminder - why use your investment ISA allowance?

The number one reason for making sure you use your annual ISA allowance each year is the tax advantages. No income tax is payable on the capital gains that you make, and there is there no requirement for you to declare any ISA income or capital gains on your tax return.
Investment ISAs therefore provide tax-efficient income and growth, the value and benefit of which is compounded over time.

Click here to compare our Fund ISA selections >>

No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment. If you are at all unsure of the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice. Tax treatment depends on your individual circumstances and may change. Before transferring an ISA please check there are no penalties for withdrawal from your existing ISA provider.

The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. Different types of investment carry different levels of risk and may not be suitable for all investors. Past performance is a not a guide to future performance.

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