112 funds that financial experts are backing for success

Concerns about tax rises and pension and ISA reform may prompt investors to put as much money away as possible in the build up to the Autumn Budget - but where are the best places to stash your cash?

Chancellor Rachel Reeves is rumoured to be considered reforms to ISAs that could restrict the cash ISA allowance, as well potential restrictions on pension tax relief as part of plans to balance the nation’s finances in her latest fiscal update.

This may encourage more people to make use of existing allowances to keep as much money away from the taxman as possible.

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But it is important to put your money into reliable investments that have the best chance of delivering a decent return, even if you can’t guarantee market performance.

Looking at historical data on fund returns is one way to build a portfolio but there are other factors to consider.

Investment platform Bestinvest has compiled a Best Funds List based on the selection process used by its parent company Evelyn Partners in client portfolios, which are worth £64.6 billion.

It considers managers who don’t just hug the benchmark and show they can beat it, as well as those who invest their own money in top stocks.

The list favours fund managers with clear objectives who consider the long-term fundamentals rather than short-term gains.

It also favours managers who can find a nice balance between diversification and investing with conviction in a select number of positions as well as portfolio sizes that are manageable with a stable management team.

The latest edition features 142 funds, including 112 actively managed investments comprising 85 funds and 27 investment trusts, selected for their potential to deliver market-beating returns over the longer term.

There are also 45 passive options, including both traditional index tracker funds and exchange traded products, that fee-conscious investors may prefer.

Plus, there are 13 environmental, social and governance-focused investments, for those seeking to align their portfolios with environmental and social values.

Here is how the experts are investing.

Finding value in UK equities

The UK stock market may not post the same top returns compared with somewhere like the US, but the FTSE 100 has hit record highs in recent months and there are plenty of companies offering attractive dividends.

Bestinvest says the UK market offers opportunities for value-oriented investors, with a strong tilt towards value and defensive sectors, including financials, energy and healthcare.

The report said: “While the UK lacks the big tech giants listed in the US, other major sectors in the UK, such as financials and defence companies, are thriving. Share buybacks are prevalent, particularly among FTSE 350 companies. Major companies conducting buybacks this year include Shell, GSK, HSBC and Unilever, to name but a few.”

Investors can access these sorts of companies through funds such as Artemis UK Select

Fidelity Special Situations, Temple Bar Investment Trust and the iShares Core FTSE 100 UCITS ETF.

UK All Companies

Artemis UK Select

Fidelity Index UK

Fidelity Special Situations

IFSL Evenlode Income

JPM UK Equity Core

Liontrust UK Growth

Montanaro UK Income

Premier Miton UK Growth

Royal London Sustainable Leaders Trust

UK Smaller Companies

L&G UK Mid Cap Index

RGI UK Listed Smaller Companies

WS Gresham House UK Smaller Companies

UK Equity Income

BlackRock UK Income

Redwheel UK Value

TM Redwheel UK Equity Income

Trojan Ethical Income

Healthy European equities

Similar to the UK, Europe is facing various economic and political challenges, but European equities actually outperformed their US counterparts in the early part of the year.

Bestinvest said: “Germany’s substantial increases in defence and infrastructure spending are expected to provide economic stimulus. However, political uncertainty in France continues.

"Despite varying economic conditions, Europe remains home to a diverse universe of best-in-class companies. From world-renowned healthcare firms to luxury goods and industrial leaders, the region offers a wealth of opportunities for skilled fund managers.”

Two of the best funds to access the continent include Blackrock European Dynamic and Liontrust European Dynamic, according to Bestinvest

Europe excluding UK

BlackRock Continental European Income

BlackRock European Dynamic

Fidelity European

HSBC European Index

Liontrust European Dynamic

Making American stocks great again

US stocks have dominated financial markets in recent years, with the Magnificent 7 technology firms driving investor interest.

But there have been concerns that valuations across US equities appear stretched when compared with historical averages, prompting a more cautious outlook among investors.

There are also concerns about the slowing jobs market and the potential impact of Trump tariffs on consumer prices. These factors could weigh on economic momentum and investor sentiment. However, Bestinvest said the US is a resilient market that could further benefit from deregulation, tax cuts, and positive company earnings.

North America

Brown Advisory US Sustainable Growth

Dodge & Cox Worldwide US Stock

Edgewood L Select US Select Growth

GQG Partners US Equity

L&G S&P 500 US Equal Weight Index

L&G US Index Trust

Premier Miton US Opportunities

TM Natixis Loomis Sayles US Equity Leaders

North America Smaller Companies

Federated Hermes US SMID Equity

Navigating emerging markets

Emerging markets can be challenging to navigate, particularly in Asia where countries face varying economic outlooks, said Bestinvest

India and China are facing trade tensions with the US, while smaller countries in the region may be where the best growth is, albeit with more risk.

M&G Asian is one way of putting your money into the region as is Ashoka WhiteOak Emerging Markets Equity, which aims to back high-quality businesses at attractive valuations.

Asia Pacific excluding Japan

Federated Hermes Asia ex-Japan Equity

Jupiter Asian Income

Schroder Asian Income

Schroder ISF Asian Total Return

Global Emerging Markets

Ashoka Whiteoak Emerging Markets

Equity Fidelity Index Emerging Markets

TM Redwheel Global Emerging Markets

Vanguard Emerging Markets Stock Index

Going Japanese

Japanese equities present “valuation diversification,” according to Bestinvest, with its stocks often trading at lower price-to-earnings (P/E) ratios than their US counterparts.

The report said: “This creates potential value opportunities for investors. Furthermore, corporate governance reforms have led to improved capital efficiency and stronger shareholder returns, with companies increasingly engaging in stock buybacks and dividend payouts.”

Investors can access world-leading industries, particularly in electronics and automotive manufacturing through funds such as M&G Japan and the JPMorgan Japanese Investment Trust.

Japan

iShares Japan Equity Index (UK)

JPM Japan M&G Japan

Going global

A global equity fund can give you access to the best regions and companies in one portfolio, providing a diverse mix of industries and geographies.

Bestinvest said: “By investing across regions and sectors, these funds can help mitigate risk and improve long-term stability - making them a valuable tool for building balanced portfolios.”

The report recommends Loomis Sayles Global Growth Equity and Fidelity Index World.

Global

Baillie Gifford Global Discovery

Brown Advisory Global Leaders

Brown Advisory Global Leaders Sustainable

Fidelity Index World

Fiera Atlas Global Companies

Fundsmith Equity

Fundsmith Stewardship

GuardCap Global Equity

Loomis Sayles Global Growth Equity

Schroder Global Sustainable Value Equity

UBS FTSE RAFI Developed 1000 Index

Vanguard FTSE Dev World ex-UK Equity Index

Vanguard Global Small-Cap Index

Global Equity Income

Baillie Gifford Responsible Global Equity Income

Fidelity Global Dividend

Guinness Global Equity Income

IFSL Evenlode Global Income

Finding fixed income

Economic uncertainty is making fixed income attractive and current bond yields are offering an attractive entry point for investors seeking to lock in relatively predictable returns, according to Bestinvest.

The wealth manager said: “With yields elevated across various fixed income instruments, this environment presents an opportunity to consider bonds for both defensive and income-generating portfolios. UK Gilts continue to look appealing - especially with the potential of future interest rate cuts from the Bank of England, should inflation remain under control.

It suggests the Invesco Tactical Bond and iShares Core UK Gilts UCITS ETF to get exposure to fixed income.

UK Gilts

Vanguard UK Government Bond Index

£ Global Corporate Bonds

Aegon Global Short Dated Climate Transition

Global Mixed Bonds

Vanguard Global Short-Term Bond Index

£ Corporate Bonds

Artemis Corporate Bond

Premier Miton Corporate Bond Monthly Income

TwentyFour Corporate Bond

Vontobel Fund TwentyFour Sustainable Short Term

Bond Income

Vontobel TwentyFour Absolute Return Credit

£ Strategic Bonds

Invesco Tactical Bond (UK)

M&G UK Inflation Linked Corporate Bond

MI TwentyFour AM Dynamic Bond

USD Government Bonds

Vanguard US Government Bond Index

Going for gold

Gold has hit record highs again in recent weeks, reflecting the economic and geopolitical uncertainty.

Alongside gold, infrastructure-focused funds are gaining traction as long-term investment opportunities, Bestinvest said.

It recommends Invesco Physical Gold and Lazard Global Listed Infrastructure Equity.

Specialist

BlackRock Gold & General

Guinness Sustainable Energy

Lazard Global Listed Infrastructure Equity

M&G Positive Impact

Ninety One Global Environment

Targeted Absolute Return

Atlantic House Defined Returns

TM Fulcrum Diversified Absolute Return

Graham Macro

Lazard Rathmore Alternative

Ninety One Diversified Income

Flexible Investment

Trojan Fund

Property

Premier Miton Pan European Property Share

Short Term Money Market

Goldman Sachs Sterling Liquid Reserves

Exchange traded funds

Amundi US TIPS Government Inflation-Linked

Bond ETF

Invesco FTSE RAFI US 1000 ETF

Invesco Physical Gold ETC

iShares $ Treasury Bond 3-7y ETF

iShares $ Treasury Bond 7-10y ETF

iShares £ Ultrashort Bond ETF

iShares Core FTSE 100 ETF

iShares Core MSCI Japan IMI ETF

iShares Core UK Gilts ETF

iShares MSCI USA Screened ETF

iShares MSCI World Energy Sector ETF

iShares UK Property ETF

SPDR Bloomberg Sterling Corporate Bond ETF

SPDR MSCI All Country World ETF

SPDR MSCI World Technology ETF

SPDR S&P 500 ETF

JMP UK Equity Core UCITS ETF

Vanguard FTSE 250 ETF

Vanguard FTSE All-World UCITS ETF

Vanguard S&P 500 ETF

Xtrackers MSCI World Communication Services ETF

Xtrackers MSCI World Consumer Discretionary ETF

Xtrackers MSCI World ex USA ETF

Xtrackers MSCI World Financials ETF

Xtrackers MSCI World Health Care ETF

Xtrackers MSCI World Industrials ETF

Xtrackers MSCI World Momentum ETF

Xtrackers MSCI World Quality ETF

Xtrackers S&P 500 Equal Weight ETF

Investment trusts

Asia Pacific Excluding Japan

Schroder Asian Total Return Inv. Company

Schroder Oriental Income

Europe Excluding UK

Fidelity European Trust

Global

Alliance Witan

Monks

Personal Assets Trust

RIT Capital Partners

Global Emerging Markets

Templeton Emerging Markets Investment Trust

Global Equity Income

JPMorgan Global Growth & Income IT

Japan

JPMorgan Japanese Investment Trust PLC

Property

LondonMetric Property PLC

Picton Property Income Ltd

TR Property

Specialist

3i Infrastructure

Allianz Technology Trust

HarbourVest Global Private Equity

HgCapital Trust

Impax Environmental Markets

International Public Partnerships Ltd

NB Private Equity Partners Ltd

Pantheon International

UK All Companies

Fidelity Special Values Plc

Finsbury Growth & Income

Mercantile IT

Temple Bar

UK Smaller Companies

Aberforth Smaller Companies Trust

Henderson Smaller Companies

Jason Hollands, managing director of Bestinvest, said: “As speculation mounts over potential changes to the way pensions, savings and investments are taxed, we anticipate that many investors will once again choose to utilise their tax-free ISA and pensions allowances ahead of the Budget, as they did last year.

“But once an ISA is funded, it is vital to choose the right investments to meet desired savings goals, risk tolerance and time horizons and which will fit alongside existing holdings.

"This can be a daunting process, even for the most seasoned investors given the breadth of choice. That’s where our Best Funds List comes in – offering a curated selection of funds that our research team believe stand out in their respective categories.”