What the experts are doing with their ISAs
As the season draws to a close, we ask three industry professionals how they are using their tax-free allowance.
By Lora Coventry, Senior Reporter, FE Trustnet
Thursday March 22, 2012
Advisers have been adding risk to their portfolios this year, as we head towards the close of the ISA season.
Tim Cockerill, head of collectives at Rowan Dartington
"I’d be looking to use Schroder Small Cap Discovery
. It’s a very new launch, but the manager Matthew Dobbs has been around for a long time. It invests in Asian and emerging market small caps, so it suits me as I’m happy to take risk and have lower-risk funds elsewhere in my portfolio. I wouldn’t put the full ISA limit in there."
Dobbs also heads up the Schroder Asian Alpha Plus fund, which is one of the best-performing portfolios of its kind over a three-year period.
Adrian Lowcock, senior investment adviser at Bestinvest
"For my 2011/12 ISA I have looked to add a bit of risk to my portfolio. I like the long-term argument for Asia and having seen periods of weakness over the last 12 months I have invested in Aberdeen Global Asian Smaller Companies
"Whilst this is a riskier investment, I am looking to invest in my ISA for at least the next 20 years so am willing to tolerate a higher level of risk."
The $1.2bn Aberdeen Global Asian Smaller Companies fund has returned 122.37 per cent over five years – the highest of any portfolio in the IMA Asia Pacific ex Japan sector. In spite of its bias to small, illiquid companies, it is also one of the least volatile funds of its kind.
Lowcock added: "In addition I like long-term special situations and have invested in M&G Recovery
, topping up my holding. I like the approach taken by Tom Dobell
and accept there may be periods where his views are out of favour, but that is the nature of the beast. This fund also appeals for long-term growth."
Launched in 1969, M&G Recovery is one of the most established and highest profile funds in the IMA unit trust and OEIC universe. It has returned in excess of 44,000 per cent since inception.
"I have also purchased Newton Global Higher Income
to tap into the growth of global income and the long-term benefits reinvesting dividends brings," Lowcock continued.
"I have used my full ISA allocation but have held a little back in cash to ensure that I can access markets should they weaken. In general I am not changing my approach to last year, my objectives have not changed in the last 12 months and indeed markets haven’t moved much either. My focus is on long-term returns so I look to global growth (Asia and emerging markets) and the power of equity income and dividend reinvestment."
Patrick Connolly, head of communications at AWD Chase de Vere
"I have regular premiums going into a mix of Schroder Global Emerging Markets
, Fidelity South East Asia
, M&G Global Basics
and JPM Europe Dynamic
"This has been running over about 18 months. I am happy to hold all of these funds in the long-term and so am building up exposure to each of them."