FTAdviser.com

Advertising

Rosemary Heaversedge, Shropshire Independent Financial Services

“One of my favourites is Invesco Perpetual’s £8.7bn High Income fund, managed by Neil Woodford. In times like these, when there are dark clouds over the markets, it is good to have a manager you have confidence in."

"He called it right when the dot.com boom happened and he managed to avoid banks pretty well last year. I am cautious of the size of the fund and am aware it could cause difficulties, but Invesco has sought to reassure me there is not a problem. It has suffered a little recently because of some holdings in the US, but not disastrously. I have confidence in Mr Woodford - he has been managing the fund for a long time and his long-term strategy is very good.”

Jim Clancy, Clancy’s Financial Planning

“I am very keen on the £275m Dimensional Global Short Dated Bond fund. It is very good at stabilising a portfolio and provides an income stream. Short-dated gilts are going to do very well in this volatile market - this fund has taken advantage of the credit crunch and invested in high-quality bonds. It is not going to shoot the lights out, but it is a very good diversifier. The managers have a very long-term approach to investing and do not alter the portfolio on every whim of the market – there are very few other funds that are like that. I have been making more and more use of this fund in clients’ portfolios because of what has been going on in equity markets.”

Gavin Haynes, Whitechurch Securities

“With equities not doing so well, we have been looking at a lot of fixed income funds to provide decent returns. Probably the fund we are most keen on is £198.3m Artemis Strategic Bond fund, managed by James Foster. There seems to be the potential for a good total return over the next 12 months at least. It can invest in all areas of the corporate bond market, at the moment it is mostly in investment-grade bonds. It is currently focusing on distressed financials and trying to exploit that area. It offers a good play on that out-of-favour recovery area. We have followed Mr Foster for a while and see him as a pretty reliable bet. The value definitely seems to be in bonds at the moment as opposed to equities.”

Derek Capelin, Capelin Financial Management

“We are looking a lot more at absolute return investing and are very keen on £630m BlackRock Absolute Alpha fund. There were a couple of market corrections last year but the portfolio did not show much volatility. It returned about 9 per cent, which I suppose is a testament to the manager and a robust investment style. The reason this kind of fund is important is because the bull market is well and truly over. Investors had a huge appetite for risk, but are now realising they are not bulletproof. Investors do not like losing money, so absolute returns are becoming increasingly important. It is quite a new fund, so it will be interesting to see if the manager can continue his track record over the long term.”

Kelvin Lillywhite, Best Advice Financial Planning

“Investors are finding it harder to get returns from a traditional balanced portfolio, so we have been re-arranging the asset allocation by adding commodities exposure. A very good fund for this is the £1.9bn JPMorgan Natural Resources fund. We have been cutting traditional equity exposure in favour of funds like this, as well as increasing cash and fixed income to compensate for the increased risk. It is quite difficult to get direct access to commodities without going offshore. This fund invests in companies that are involved in commodities, so it is an equity portfolio, but a pure commodity play. The figures speak for themselves, the fund has returned 32 per cent over one year by investing in gold and precious metals. It is also top quartile over one, five and 10 years.”

Ben Yearsley, Hargreaves Lansdown

“I have never been a big fan of bond funds, but in recent months my attitude has totally changed. The sector has been absolutely hammered and they are looking incredibly cheap. My favourite at the moment is Invesco Perpetual’s £1.8bn Monthly Income Plus, which is yielding about 8 per cent. In fact the way things are going there is the potential for a double digit return over the next 12 months. Bonds are yielding a lot and there is the potential for capital growth as well. This fund is particularly appealing because of the managers Paul Causer and Paul Read, who are both very good. There is also a 20 per cent chunk of the portfolio which is in equities and that is managed by Neil Woodford.”

Melyvn Bell, Lowes Financial Management

“We have been using the £1.8bn Jupiter Merlin Income Portfolio on a consistent basis. The managers have done an excellent job. Algy Smith-Maxwell, Peter Lawery and John Chatfeild-Roberts have all managed the fund since launch in about 1997, which is positive. The multi-manager portfolio is something we like - with markets the way they are, helps having that extra layer of risk diversification. It is fairly actively managed but does not take on a lot of risk, it just adds value on a consistent basis. Consistency is critical, you want people you can feel confident about in all market conditions.”