Funds run by Artemis, Columbia Threadneedle, Liontrust and Jupiter have been picked as ones for investors to consider over the year ahead by investment platform AJ Bell. 
In a previous article, AJ Bell head of active portfolios Ryan Hughes said trusts such as Personal Assets, Fidelity Special Values, Standard Life UK Smaller Companies and City of London could be good options for investors of risk tolerances.
Below, we turn to the open-ended space and find out which Hughes is tipping for cautious, balanced, adventurous and income investors across 2021.
Cautious – Artemis Corporate Bond
First up is Hughes’ fund pick for cautious investors, who might be trying to generate a little extra return given that the yield on cash is almost non-existent. For this, he highlighted Stephen Snowden’s £468m Artemis Corporate Bond fund.
Performance of fund vs sector since launch
Source: FE Analytics
“While yields on corporate bonds are low, they do offer a step up over cash and therefore still have a role to play for investors. With some companies likely to struggle through 2021 and potentially go bust, taking an active approach to the asset class with a manager prepared to invest away from the benchmark could be beneficial,” Hughes said.
“Artemis Corporate Bond brings just that with a pragmatic manager in Stephen Snowden who is comfortable standing out from the crowd and being genuinely active.”
In recent months, Snowden has been investing in bonds in some of the sectors worst affected by the coronavirus pandemic, including those issued by airports. The manager has “a lot” in financials, diversified real estate and healthcare, although he is avoiding sectors that appear structurally challenged, such as retail.
Since launch in October 2019, the fund has made a 14.43 per cent total return – which makes it the fifth highest-returning member of the IA Sterling Corporate Bond sector over this time frame.
Artemis Corporate Bond has an ongoing charges figure (OCF) of 0.39 per cent and is yielding 2.23 per cent.
Balanced – Threadneedle UK Equity Income
For investors with balanced portfolios, Hughes thinks Richard Colwell’s £3.7bn Threadneedle UK Equity Income fund is worth considering.
“While this is an income-focused fund, it is very much managed on a total return basis and makes for a solid core UK equity holding,” he said.
“The approach is best described as gently contrarian and Colwell is happy taking active positions with big underweights currently in financials, miners and oil stocks, despite their potentially higher yields.”
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
Although many investors have been underweight the UK for some time, hopes of more certainty over the country’s post-Brexit future and the early rollout of a coronavirus vaccine has seen sentiment improve relative to more expensive international peers.
Hughes said Threadneedle UK Equity Income’s track record shows it can add value despite it having significant exposure to larger companies. The fund has made top-quartile returns over 2020 so far; it is also in the IA UK Equity Income sector’s first quartile over three, five and 10 years.
Threadneedle UK Equity Income has an OCF of 0.82 per cent, with a yield of 3.40 per cent.
Adventurous – Liontrust Sustainable Future Global Growth
More adventurous investors might want to take a look at the £1bn Liontrust Sustainable Future Global Growth fund, which is managed by Peter Michaelis, Simon Clements and Chris Foster.
The managers identify the key growth themes that will shape the global economy of the future then buy companies best-placed to capitalise on them. This leads to a strong growth bias with large allocations to technology and healthcare, which brings with it a high weighting to the US.
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
“With valuations potentially looking a bit rich in some cases, this is in the adventurous camp but for investors that want exposure to sustainable themes, the Liontrust team is up there among the best,” Hughes said.
“The growth in interest in ESG investing has been one of the big stories of 2020 and it is clear that it has become firmly embedded and is here to stay. The team at Liontrust have been investing with a sustainable approach for many years and have a great understanding of the way that companies are adapting to the importance of ESG along with the way that the behaviour of people is also changing.”
The fund has made more than 30 per cent in 2020, which puts it in the top quartile of the IA Global sector. It’s in the peer group’s first quartile over three, five and 10 years as well.
Liontrust Sustainable Future Global Growth has an OCF of 0.89 per cent.
Income – Jupiter Japan Income
Finally, Hughes said investors with an income slant to their portfolio might want to look beyond the core UK equity income or bond strategies to consider Dan Carter and Mitesh Patel’s £818m Jupiter Japan Income fund.
“Japan and income are not always two investment themes that go together but in recent years Japanese companies have evolved to become highly profitable and consequently have significant amounts of cash on their balance sheets,” he explained.
“This is translating into dividends with company management showing more understanding of the importance of dividends to overseas investors. Jupiter Japan Income actively seeks out those high-quality companies that are generating profits and have a willingness to return that to shareholders as dividends.”
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
Although the 2.4 per cent yield on the fund looks low when compared with UK (the FTSE 100 is currently yielding around 3.9 per cent), Hughes said the potential for this to grow in the years ahead is “very strong” given Japanese companies’ low debt levels.
The fund’s 11.96 per cent return in 2020 puts it in the IA Japan sector’s third quartile, although it has made first-quartile returns over three years and is second-quartile over five years.
Jupiter Japan Income has a 0.98 per cent OCF.