How to use the wealth shortlist


Being a kid in a candy store isn’t always as fun as it sounds. While having a lot of choices can be a good thing, when it comes to investing, it can often be more of a hindrance than a help.

Investment funds can be a good choice for long-term growth or potential income. But there are thousands of funds available for UK investors, and knowing where to start can be a challenge.

That’s why we launched the Wealth 150 in 2003 – to narrow the field and help investors choose from a shorter list of what our research team thinks are great funds with the potential for long-term returns. Over the years our list has evolved, responding to client needs and changes in the investment industry, as well as our greater collective expertise, to become today the Wealth Shortlist.

In this article, we explore how investors can use the Wealth Shortlist, which includes a variety of funds with different goals and areas of interest.

This article is not personal advice. If you are not sure whether an investment is right for you, seek financial advice.

Funds selected by our analysts

The Wealth Shortlist is designed to help investors build well-balanced and diversified portfolios. Our research team takes a close look at funds to ensure that the list contains only those funds that, according to our in-depth analysis, have the greatest potential for performance.

To use the shortlist to build a portfolio, you need to be comfortable deciding whether a fund matches your investment objectives and risk attitude, and know how to choose and maintain a diverse mix of funds to help. reduce the risk.

The Wealth Shortlist includes funds across a wide range of industries and risk levels that won’t be right for everyone – this is not personal advice. You will need to think about your own goals, attitude to risk, and a larger portfolio before making any investment decisions. Funds can go down as well as up and you might get back less than what you put in.

Learn more about how funds are listed.

How to filter funds

To get investors started on their journey, the Wealth Shortlist can be filtered into three main categories: fund industry, fund objective and fund type.

Fund sectors cover a wide range of geographies and investments, including bonds and corporate stocks (stocks). Generally speaking, we believe that investors should maintain well-diversified portfolios spread across many different investments, sectors, regions and investment styles. But which ones you choose depend on your personal situation.

Equity funds might be a better option for those looking to build wealth over the long term (at least 5-10 years), but are willing to see the value of their investment fluctuate over time. Some are called “equity income” funds – they invest in dividend-paying companies and aim to pay investors income, either monthly or every three or six months. These can also increase in value over time. It is important to remember, however, that income is not guaranteed.

There are several sectors focused on corporate stocks. These include the global sector, where funds can invest in companies around the world. Others focus on a specific country or region like UK, North America, Europe or Japan. Some focus on higher risk areas that offer long-term growth potential but with increased volatility, such as emerging markets, Asia and small businesses.

Other funds focus on bonds. Bonds are loans issued by businesses and typically pay a fixed rate of interest (or income) to the lender. They are often considered “less risky” than investing in a company’s shares. This means that they can help limit some of the ups and downs that normally accompany investing only in stocks. They can still lose money, however, and income from bond funds is variable and unsecured.

Read our latest industry reviews

There are different types of bond funds, including corporate bond funds that focus on high quality bonds. These may offer lower returns than higher risk, higher yield bonds. Strategic bond funds are more flexible. They have the freedom to invest in bond markets, including government, corporate and high yield bonds.

Some funds, including Multi-Asset and Total Return funds, invest in both stocks and bonds, as well as other assets, such as commodities and currencies. Everyone is different with their own goals – some focus more on growth, others on income, while others aim to protect wealth when markets fall. It is therefore worth considering the purpose of each fund and where it invests before considering investing.

To help you, you can also filter funds by purpose – either income, growth, or income and growth.

Finally, you can filter by type of fund – active or passive. Actively managed funds aim to outperform their benchmark over the long term. Tracker funds, or liabilities, aim to perform in the same way as their benchmark index (the market they follow). Some investors prefer one type over the other, although for some a mix of the two may be preferable.

How to use active and passive funds

Look under the hood

Once you know your investment goals and the type of fund you want to invest in, there are several to choose from in each industry.

For each Wealth Shortlist fund, you can choose to display “more information”. Here we present a summary of why our analysts selected the fund and how it fits into a portfolio. For each fund, you can see if it aims to generate income, growth, or both. We also look at other important areas such as management style, major holdings, costs, risks and performance.

You can also consult the technical sheet of each fund. From here you can read more of our research as well as the latest fund research update. These updates provide an overview of the latest opinions from our analysts on each fund, including manager, process, culture and performance.

Keep in mind that in each industry you may want to consider fund managers who use different approaches. This can help you get a more diverse mix of investments within a single industry. Not all investing styles perform well at one time, and managers with different strengths, styles and areas of interest will behave differently over time. Remember that past performance is no guarantee of the future.

Investments are not static, so once you have invested, remember to monitor your portfolio and make changes if necessary. There’s no hard and fast rule about how often you should review your portfolio, but we think twice a year makes sense – at least once a year.

To help you along the way, our analysts provide ongoing research updates for each fund on the Wealth Shortlist, which includes an update on performance and key changes to how the fund is invested. . These are emailed to fund holders, or you can sign up for fundraising here.

Read Fund Updates from the HL Research Team

See all the funds selected by our analysts

The Wealth Shortlist is designed to help investors build their own well-balanced and diversified portfolios. We take a close look at funds to make sure the list only contains funds that our in-depth analysis shows have the greatest potential for performance.

See the wealth shortlist

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