Hargreaves Lansdown: Four Fund Pairings That Show Opposites Attract
Investing can mirror personal relationships; partnerships can enhance performance. Hargreaves Lansdown’s lead investment analyst, Kate Marshall, emphasizes that combining different fund strategies can lead to more stable portfolios. “Opposites can attract and, when they do, they often work better together,” she states. By diversifying, investors may mitigate the fluctuations typical in financial markets.
Understanding Fund Pairings in Investing
Marshall details that no single investment strategy excels in every market condition. This is where pairing funds with complementary yet differing strategies becomes beneficial. Below are four strategic pairings recommended by Hargreaves Lansdown.
1. Rathbone Global Opportunities and Invesco Tactical Bond
- Rathbone Global Opportunities: Managed by James Thomson since 2003, this equity-focused fund is a favorite at Hargreaves Lansdown, displaying a remarkable 222.1% growth over the past decade, surpassing the IA Global average of 175.2%.
- Invesco Tactical Bond: Managed by Julian Eberhardt and Stuart Edwards, this fund offers a flexible approach to fixed income, allowing exposure to high-risk segments like high yield and derivatives. This adaptability could help balance equity market volatility.
2. Baillie Gifford American and Lazard Global Equity Franchise
- Baillie Gifford American: Focused on high-growth U.S. businesses, this fund invests heavily in innovative sectors like artificial intelligence. However, its concentrated portfolio of top holdings can create volatility during market downturns.
- Lazard Global Equity Franchise: This value-focused fund targets high-quality firms with stable earnings and is less exposed to the U.S. market, thus providing a contrasting investment style to Baillie Gifford.
3. Artemis UK Smaller Companies and Troy Trojan
- Artemis UK Smaller Companies: Managed by William Tamworth and Mark Niznik, this fund specializes in undervalued UK small caps. It has achieved significant performance, rising 38.8% in five years compared to a mere 2% average in its peer group.
- Troy Trojan: Under the leadership of Sebastian Lyon and Charlotte Yonge, this multi-asset fund aims to protect capital through strategic assets, including shares and index-linked bonds, making it a robust complement to the more volatile Artemis fund.
4. Fidelity Index World and Jupiter India
- Fidelity Index World: This low-cost tracker fund mirrors the MSCI World Index, offering reliable global market exposure. With a majority of its assets in U.S. stocks, it serves as a foundational investment in many portfolios.
- Jupiter India: Managed by Colin Croft and Avinash Vazirani, this fund seeks substantial growth in the Indian market. Despite its high-risk profile, it has delivered solid returns, outperforming its sector during recent market fluctuations.
Conclusion
Strategically pairing funds with opposite attributes can create a more balanced and resilient investment portfolio. By considering different asset classes and investment styles, investors can navigate market challenges more effectively. Diversification remains a key strategy for smoothing the ride through turbulent economic climates.
