Wealth manager Bestinvest, part of financial services company Tilney, is launching a new ‘best funds list’ this month in a controversial market where top recommendations have previously lost money for investors.
Unlike some competitors, investment trusts and index-tracking exchange traded funds are included in a 119-strong list that is dominated by unit trusts and open-ended investment companies.
The best-buy recommendation market has been tainted since competitor Hargreaves Lansdown promoted failed fund Woodford Equity Income as a top buy right up until it was suspended in June 2019. Many investors lost half their savings as a result of the fund’s break-up.
Tainted: The best-buy recommendation market has been tainted since competitor Hargreaves Lansdown promoted failed fund Woodford Equity Income
Hargreaves Lansdown has since rebranded its recommendations as a ‘Wealth Shortlist’ of more than 50 choices. Other wealth managers also provide top buys – including an ‘ii Super 60’ marketed by Interactive Investor.
Bestinvest claims to offer a continuous vetting process to try to ensure such errors do not happen on its patch. This includes sifting through actively managed funds to look at their decision making process – and to check they are not simply hugging a benchmark index such as the FTSE All-Share.
It also seeks out managers who put their own money into the fund while looking at the impact of management changes on a fund’s ability to perform.
Among its favoured UK-focused funds are Jupiter UK Special Situations, Liontrust UK Growth, Threadneedle UK Equity Income and Evenlode Income. Global recommendations include Loomis Sayles Global Growth Equity, Fundsmith Equity and Fidelity Global Dividend. For investment trusts, among those recommended are Henderson Smaller Companies, Fidelity Special Values, Edinburgh Worldwide and Pacific Assets.
Jason Hollands, managing director of Bestinvest, says: ‘Investors must always ask themselves on what basis the funds that make up best-buy lists are selected. This is why we look at the whole of the market, including investment trusts.’
Bestinvest’s 40-page best funds list can be downloaded for free via bestinvest.co.uk/research/the-bestfunds-list.
