Putting money into investment funds can be an excellent way to build wealth over the long term. With these products, one can get broad exposure to the stock market at a relatively low cost.
Here, I’m going to highlight five actively-managed funds that I think are worth considering for 2024. All of these products have strong long-term track records and have the potential to beat the market going forward.
Two magnificent global equity funds
When building a portfolio, it can be smart to start with a selection of global equity funds (because many of the world’s most dominant businesses are listed overseas).
And one of my top picks here is Fundsmith Equity. It’s a ‘high-conviction’ fund that has a focus on high-quality companies that are consistently profitable (e.g., Microsoft, Visa)
Fundsmith has lagged the market this year due to the huge gains from mega-cap tech. However, I’m not willing to write it off yet.
Over the long run, it has beaten the market by a wide margin. And it tends to outperform when conditions are challenging.
That said, I think it’s worth hedging one’s bets with other global funds in case performance is below-par again in 2024.
And a second global fund that I think is worth a look is Stonehage Fleming Global Best Ideas. This is another concentrated, high-conviction fund.
I like the holdings here. The top 10 currently includes the likes of Alphabet, Amazon, and S&P Global.
I also like the performance track record. Over the last five years, it has comfortably beaten Vanguard’s global index fund.
Of course, past performance is not an indicator of future returns. I’m very comfortable with the approach and holdings though.
A top UK fund
Zooming in on the UK, I want to highlight Royal London Sustainable Leaders Trust.
This fund has a very different composition to the broader UK market. But I think that’s a good thing.
Top holdings include the likes of London Stock Exchange Group, Relx, and Sage. I’d argue these kinds of companies – which are all tech focused – are better long-term bets than oil or tobacco businesses.
This approach has certainly paid off in the past. Over the last five years, the fund has returned 58% versus 35% for a FTSE 100 tracker.
Two compelling thematic funds
Taking a thematic view, I like the Sanlam Global Artificial Intelligence fund.
As its name suggests, this is focused on artificial intelligence (AI).
AI is an area of technology that can’t be ignored today. In the years ahead, it is likely to disrupt every industry.
This fund offers exposure to both companies offering AI services like Microsoft and Nvidia, and businesses benefitting from the tech.
But AI stocks did have a huge run in 2023, so again, it could be worth hedging one’s bets here.
And one fund that I think could help do this is Schroders Global Healthcare.
This is purely focused on the Healthcare sector.
Healthcare stocks underperformed in 2023 as investors piled into the tech sector.
The long-term growth story remains attractive though. And if markets are turbulent in 2024, healthcare could provide some protection.
It’s worth pointing out that all of these products have their own risks. Given that they are actively managed, they could all underperform the market in 2024. As always, taking a diversified approach is smart.
|
Fund |
1-year return (%) |
3-year return (%) |
5-year return (%) |
|
Fundsmith Equity |
13.5 |
16.5 |
69.7 |
|
Stonehage Fleming Global Best Ideas |
18.1 |
14.4 |
76.0 |
|
Royal London Sustainable Leaders Trust |
9.7 |
19.1 |
57.8 |
|
Sanlam Global Artificial Intelligence |
37.6 |
22.2 |
162.7 |
|
Schroders Global Healthcare |
1.1 |
11.1 |
63.4 |
The post 5 super investment funds to consider for 2024 appeared first on The Motley Fool UK.
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Ed Sheldon has positions in Fundsmith Equity, Sanlam Global Artificial Intelligence, Schroders Global Healthcare, Alphabet, Amazon, London Stock Exchange Group Plc, Microsoft, Nvidia, Sage Group Plc, and Visa. The Motley Fool UK has recommended Alphabet, Amazon, Microsoft, Nvidia, RELX, Sage Group Plc, and Visa. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2023
