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The experts’ picks are in for 2023

13 January 2023

This week there was a lot of looking ahead. Editor Jonathan Jones focuses on the future by highlighting what others will be buying in 2023.

By Jonathan Jones,

Editor, Trustnet

The new year is a time when many of us will look at our portfolios and wonder whether now is the time to make a change. Those that looked at this time last year and thought ‘I need me some oil stocks’ would have done phenomenally well.

For those who failed to make any changes (or indeed made other switches) the chances are that last year was a bit of a write-off.

So here we are, staring into the void of 2023, wondering whether the bombed-out growth names we still own can recover or if the European fund we were so confident in can thrive despite war on the continent.

I should note – the use above of the word ‘we’ is purely to make myself feel better about last year.

In last week’s column I wrote about all things 2022, a year most would like to forget. This week we look to the future. No, I will not be getting my (oft broken) crystal ball out, but below I will highlight some prognostications from others.

On Thursday, Matteo Anelli wrote that there was one upside to 2022 – things are now cheap. Yes, finding the thinnest of silver linings among the storm clouds, Numis analysts have highlighted some of the equity trusts that are now cheaper than a special offer at B&M Home Store – my words not theirs.

There were several picks but one that caught the eye was RIT Capital, which made the list despite a recent ‘sell’ note from the Telegraph’s Questor column.

Shares slumped in the aftermath as it warned of the risk of private equity (of which this defensive trust has been piling into).

Yet at a 17% discount to the net asset value (NAV), the analysts said the trust looked like a good opportunity for savvy investors.

In the battle of the investment trust analysts, Tom Aylott wrote about Winterflood’s annual recommendations list, which included 15 new names and waved goodbye to 18 formerly backed portfolios.

Coming off a year in which just a third of the analysts’ picks managed to outperform their relevant benchmark indices in share price terms.

They focused on funds with “proven managers, strong long-term performance records, defensive characteristics and/or downside protection and funds that offer a value opportunity”.

The likes of Monks, Finsbury Growth & Income, Mercantile, Fidelity China Special Situations and Murray Income all made the list.

Turning to the open-ended sector, there are thousands of funds available, but there is only one (almost) unanimous must-buy.

Jonathan Jones trawled through the best-buy lists of five major investment platforms and found there is one rated by four of them.

Analysts at Hargreaves Lansdown, AJ Bell, interactive investor and Barclays all are of the same mind that there is a standout – only Fidelity’s researchers stood alone.

So what was this seemingly can’t miss opportunity? Was it Scottish Mortgage? How about Fundsmith Equity or Lindsell Train Global Equity?

Nope. The answer is BlackRock Continental European Income. While maybe unheralded compared to some of the biggest names in the industry, this fund, run by Andreas Zoellinger and Brian Hall hits a sweet spot of being one of a relatively small group of funds that provide income from European stocks.

It is also a top performer making investors 164% over 10 years and lost 7% last year – one of the better performances in the IA Europe Excluding UK sector. It will be interesting to see if the hive mind is right and whether the fund can continue its strong run in 2023.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.