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Something different for your ISA

Posted by: Brian Dennehy

 

Not sure where to invest your ISA this year and want to try something different?  Here are three funds for investors with a contrarian streak.

Threadneedle UK PropertyAnalysis Save to my funds Add to basket

Property? You may think this is “different” but we have stuck with this for a while.  Property was harder hit by Brexit than most of the rest of the UK, due to the sector’s illiquid nature, but most funds are heading back towards their pre-Brexit levels.

Returns are due to come more from rental income growth than from capital gains, so we don’t expect to hit the highs of 2014 but commercial property (e.g. office blocks, warehouses, shopping centres) outside the South East is still available on attractive yields.

The Threadneedle UK PropertyAnalysis Save to my funds Add to basket fund has recovered from the Brexit vote and is still supported by a healthy yield of 4.50%. If there is a little capital growth this is just icing on the cake. 

UK commercial property, as represented in this fund, still has attractions, whether you want income or total return (capital growth plus reinvested income).

A lower risk option.

JP Morgan Natural ResourcesAnalysis Save to my funds Add to basket

Commodity companies suffered when China began to slow down earlier in the decade – too many commodities were being produced when demand began to fall. That situation looks to be changing. 

Production in many instances has been cut, and commodity producers are now leaner and meaner. If governments start injecting money more directly into economies this is very supportive for commodity prices and commodity companies. Moreover, there are valuation attractions as commodity companies’ valuations languish at levels not seen since 1926 (compared to the market as a whole). 

And because of the collapse in commodity prices in recent years, most investors are very underweight this area, so there is scope for a sharp move upwards as investors move more money into commodity funds. 

JPM Natural ResourcesAnalysis Save to my funds Add to basket gives investors access to this potential. But this is a higher risk strategy, so expect volatility.

Jupiter IndiaAnalysis Save to my funds Add to basket

India’s story remains on track. The removal of higher value rupee notes preoccupied foreign headlines but the long-term implications of reducing the space for the black economy to operate has very positive long-term benefits. And Modi was elected on a platform of cracking down on corruption, so this isn’t surprising. 

The passing of the Goods & Sales Tax also has great long-term benefits to streamlining the transfer of goods within India.  We continue to like the positive trends from a young, dynamic population and the potential waiting to be unlocked from productivity improvements.

Keep buying Jupiter IndiaAnalysis Save to my funds Add to basket to benefit from this long-term growth story. If concerned about the risks, invest monthly.

A higher risk fund.

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Topic: Portfolio building


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