Richard Troue, head of investment analysis at Hargreaves Lansdown, has revealed the investment trusts he favours for the year ahead.
The analyst said the themes that dominated stock markets in 2017 are enduring so far this year.
Companies with the potential to disrupt traditional industries remain in favour, while the industries they are disrupting are largely ignored by investors, he noted.
Meanwhile, Mr Troue said concern over Brexit were weighing heavily on the UK, and US and European companies are seen as having better prospects.
He said it is easy to see how technology-enabled, disruptive businesses could continue to have a transformative effect.
Similarly, he said it is not hard to imagine that companies reliant on the UK economy might struggle post-Brexit, if Britain fails to secure a favourable deal.
However, Mr Troue said these trends are starting to feel a bit extreme, and if history has taught us anything, it is that such extremes don't last forever.
As a result of this view, Mr Troue selected the £6.9bn Scottish Mortgage investment trust as a favoured vehicle.
He said the trust, run by Baillie Gifford, invests in companies with the potential to dominate their industry - wherever they are located.
Mr Troue said: "It is no surprise to see companies like Amazon, Tesla and Facebook among its largest investments, along with Chinese e-commerce and technology companies such as Baidu and Tencent.
"They have performed well in recent years, although some now question whether investors have got ahead of themselves, and after such a strong run, a setback can't be ruled out.
"The managers have the flexibility to invest in emerging markets, smaller companies and the shares of unquoted businesses, all of which add risk.”
The trust has just more than trebled investors cash over the past five years to 29 January, compared with the average trust in the AIC Global sector in that time period, which has just less than doubled investors capital in that time.
Mr Troue said he acknowledged the Scottish Mortgage trust is at the riskier end of the spectrum, so his choice for investors with a lower risk mindset is the £877m Personal Assets investment trust, which is run by Sebastian Lyon.
The fund manager has had a very cautious outlook for the direction of markets, a bearish view that hasn't served shareholders in the trust well in recent years.
The trust has returned 24 per cent over the past five years, compared with 46 per cent for the average trust in the AIC Flexible Investment sector in the same time period.
Returning to the theme that he thinks the UK economy will perform better than the market currently expects, Mr Troue said the trust that is best placed to profit from any shift in sentiment towards UK domestic shares is the £1.6bn Edinburgh investment trust.
Mr Troue said: "We think the negative sentiment towards the UK is overdone. And while it could still persist for a while, it has thrown up some opportunities for contrarian investors, specifically companies reliant on the domestic economy and in out-of-favour sectors, such as healthcare and financials.
"This is where this trust has a lot of investments, including in companies such as AstraZeneca, Legal & General and British American Tobacco.
"Just over half the trust is invested in larger UK businesses, and almost 30 per cent in the more domestically-focused FTSE 250 index.
"The manager also has the flexibility to use derivatives and invest in smaller companies, which adds risk.
"The fact these businesses are unloved has seen the trust's discount to NAV widen to over 8 per cent - compared with an average discount over the past three years of 3.1 per cent.”
david.thorpe@ft.com
