Standard Life Global Absolute Return Strategies
"The fund aims to generate a positive return above cash of 5 per cent over the short- to medium-term and to deliver this return irrespective of market conditions," he explained. "It’s extremely well-diversified, employing between 20 and 40 investment strategies to minimise risk."
"It differs from its peers in that the managers have the flexibility to invest anywhere in the world and indeed can invest in any asset class, making full use of the global asset team at Standard Life."
"By operating a broad number of strategies the fund could be suitable for investors looking to diversify their portfolio and reduce the volatility of their investments," he concluded.
According to FE data, the £10bn portfolio has delivered 32.58 per cent since launch in October 2007, outperforming its sector average and benchmark by 23.54 and 24.93 per cent respectively.
It has a total expense ratio (TER) of 1.6 per cent and a minimum investment of £500.
M&G Strategic Corporate Bond
"We think corporate bonds are worth investing in as they offer a route to securing income in a low growth environment," continued Lowcock. "Whilst some company debt is risker than others a bond manager can add value by identifying opportunities to enhance returns but in doing so take on less risk."
"This fund differs in that it can also use derivatives to reflect the manager’s view as opposed to taking on additional risk. The fund yields 4 per cent which is attractive in this low interest rate environment."
FE Alpha Manager Richard Woolnough’s £4.5bn fund is far and away the best-performing portfolio in its IMA Sterling Corporate Bond sector over five years, with returns of 56.23 per cent. It also has a minimum investment of £500, but its TER of 1.16 per cent makes it a little cheaper than the Standard Life GARS fund.
For medium-risk investors, Lowcock recommends a vehicle run by the highly experienced Leigh Harrison, former head of the Premier UK Alpha Income fund.
Threadneedle UK Equity Income
"Income should play an increasingly important role in investments over the next few years as growth will remain weak and interest rates are unlikely to rise in the short-term," he said.
"Threadneedle UK Equity Income takes a more cautious approach than many of its peers, aiming to deliver an above-average yield along with capital growth. The fund focuses on strong franchises in defensive sectors, but it also includes companies with pure growth prospects and rising dividends so has greater flexibility than some of its peers."
"UK equity income should be a core holding for investors and the Threadneedle fund would be suitable for a diversified investor whether they are adventurous or more cautious."
The £1.17bn portfolio is significantly less volatile than its FTSE All Share benchmark and has an FE Risk Score of just 88. Its cautious approach meant that it slightly underperformed during the 2009 and 2010 QE-fuelled rally, but it still has a better record than both its benchmark and sector over five- and 10-year periods.
Investors need to cough up at least £2,000 to get exposure to the fund and will also have to pay a TER of 1.62 per cent.
For high-risk investors, Lowcock once again selects a well-established darling of the industry.
First State Global Emerging Markets
"The Asian story has been well publicised – as eastern wages rise the demand for goods and services will follow," he explained. "We like the First State fund because it takes a cautious approach to investing, focusing on high quality stocks with long-term growth potential."
"Manager Jonathan Asante is a conservative manager who has a high-conviction approach – an essential trait when investing in volatile markets."
"I’d say this fund is suitable for an investor willing to take on the additional risks of emerging markets, through a sensible fund that has core exposure to the sector."
According to FE data, the £709m First State Global Emerging Markets fund is among the top-five best-performing emerging market funds over three-, five- and 10-year periods. It has a minimum investment of £1,000 and a TER of 1.88 per cent.
For those who want to liven up their portfolio with a high risk play, Lowcock points to one of the most experienced managers in the emerging market space.
Templeton Frontier Markets
"Dr Mark Mobius’ Templeton Frontiers fund is mainly dominated by Africa and the Middle East. These smaller, less developed and less liquid markets should be considered as very high risk, which is why investors should not treat this as a core investment."
"However, these are the kind of markets that could be the next China or India and thus they have huge potential for massive gains."
The $844m portfolio has had an excellent start since it was launched in October 2008, amassing more than 70 per cent, compared with losses of 13.38 per cent from its MSCI Frontier Markets benchmark.
Given the specialist nature of the fund, it is significantly more expensive than those mentioned above, with a TER of 2.61 per cent and a minimum investment of £5,000.