The year ahead is likely to be "confusing" for investors, with a range of economic uncertainties, but there are opportunities for profit, according to Thomas Beckett, chief investment officer at Psigma.
Mr Beckett said his key advice for what appears to be a tricky year ahead is to ignore the noise, focus on valuations and continue to take a contrarian approach.
The first fund he nominated as worthy of the attention of investors in 2019 is the £1.4bn TwentyFour Asset Management Dynamic Bond fund.
He said: "With UK assets now distrusted and shunned by most global investors and approaching historically cheap absolute and relative valuations, investors should not throw the towel in on their UK investments.
"While the obvious play is the UK equity market and we see a probable opportunity next year to move overweight UK equities, investors could find better risk/reward opportunities in UK credit markets.
"Indeed there currently exists a 'Brexit' premium that investors can take advantage of in high quality fixed interest investments, where UK companies are being charged around 1 per cent higher to issue debt than their global peers."
Mr Beckett said TwentyFour Asset Management Dynamic Bond fund is "nimble" enough to take advantage of the uncertainties in the market.
For investors that are panicking at the prospect of being in anything other than cash for the year ahead, Mr Beckett recommended the BlackRock Gold and General fund.
Mr Beckett said the BlackRock fund forms part of his 'alternatives' allocation to defensive strategies.
He said: "Gold mining stocks have been pretty insipid since their big bounce in 2016, but we are of the belief that the tide has turned and that 2019 could well be their time to shine (please excuse the bad pun).
"Gold was swimming against the tide for much of this year; suffering from consistent outflows from US investors who saw no need for safety, as they were enjoying a strong economy and a surging stock market.
"That dynamic has clearly changed and with it the outlook for the fund and asset class. Increased caution begets increased requirement for safety and could well set the scene for good times ahead.
"We believe that the BlackRock Gold and General fund (run by portfolio managers Evy Hambro and Tom Holl) is one of the best ways to exploit what we see as outstanding long-term opportunities within this asset class."
Adrian Lowcock, head of personal investing at Willis Owen, said a fund he likes for its defensive characteristics is First State Global Listed Infrastructure.
The fund invests in companies that are mainly listed in developed markets and involved in various areas of infrastructure, including Energy, Communications and Transport.
Mr Lowcock said: "These sectors tend to be defensive in nature and have reliable income-generating characteristics. The team is led by Peter Meany, who launched the strategy in 2007.
"The managers invest in infrastructure companies that are priced below their true worth.
"Mr Meany likes companies that provide essential services because these can often raise prices in line with inflation without causing a drop in demand. This should help generate a regular income."
david.thorpe@ft.com
