Investments 

Bestinvest reveals favourite funds for 2019

Bestinvest reveals favourite funds for 2019

Bestinvest has revealed some of the funds it has placed on its buylist for 2019.

The platform, which is part of the Tilney Group, released its list a week after rival platform Hargreaves Lansdown.

In total 83 funds appeared on the list which includes both ‘actively managed’ funds, which aim to deliver superior performance than the markets over the longer-run by cherry picking investments, and low cost ‘passive’ funds which are designed to replicate broad market returns by holding a representative basket of investments.

The list also included ethical and sustainable fund ideas for investors who want to invest their money with such an approach.

Among the funds on the list was the £16bn Fundsmith Equity fund, which didn’t make the Hargreaves Lansdown list, despite being the top performer in the IA Global sector over the past five years. One of the reasons cited by Hargreaves for the emission was cost.

In response Terry Smith, fund manager and founder of Fundsmith, said the presence or otherwise of his fund on a platform made no difference to its ability to grow assets.

Other funds to have made the list were the £3.9bn Liontrust Special Situations fund, and the £2.5bn Evenlode Income fund, as well as the Lindsell Train Global Equity fund.

Among the lesser known funds to make the list were the Morant Wright Japan Equity, mandate, this is a boutique firm in vesting in Japanese equities, and Dodge and Cox, which invests in US equities.

Jason Hollands, head of communications at Bestinvest, said: "Our fund selection process is wholly investment-led.

"We seek to find the very highest quality managers who have demonstrated that their judgment has added returns after costs.

"While we will always seek to use our scale to drive down fund costs for the benefit of our clients, we will only ever select active funds on our conviction that the manager can deliver superior returns."

He added: "Over the past five years, the FundSmith Equity and Lindsell Train Global Equity funds – both of which invest across the globe, have generated return respectively of 129.1 per cent  and 128.9 per cent. These are well ahead of the 67.1 per cent return from the MSCI World Index of global stock markets.”

Mr Hollands said the difference in returns between the best and worst performing funds was significant and could not be explained by variations in costs alone.

He said: "The very best managers are worth their weight in gold, but they are a minority, so it is vital to be super-selective when choosing who to entrust your hard earned cash with or alternatively to choose low cost trackers instead.

"We believe there is a place for blending both approaches."

david.thorpe@ft.com