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The good that funds do

A quick survey of submissions to our Portfolio Clinic over the past year or so reveals almost without exception every subscriber portfolio that we review contains a selection of actively managed funds and investment trusts, mixed in with individual shares. For all the scorn poured on funds over charges and their supposed inability to outperform the market, I am not in the least bit surprised that funds are widely held by serious and experienced stockpickers. They play such a rich variety of roles. They provide solid foundations to starter portfolios and a way to learn about markets and investment strategies. They allow busy investors to outsource some of their research and stockpicking and to buy the insight that can only get from living in a country or by having access to on-the-ground reports or from acquired knowledge and expertise.

If you read our Top 50 Funds from start to finish you can get a glimpse of the trends that professionals are paying attention to and the myriad of styles they employ. Their thinking can be instructional, too. Cormac Weldon at Artemis US Select pays as much attention to evaluating financial markets and economic risks as he does to individual investment opportunities, while at Baillie Gifford Japan, Matthew Brett and Praveen Kumar like to keep their eyes on the long-term potential value of stocks and on finding disruptive companies. At FTF Martin Currie Japan Equity manager Hideo Shiozumi believes Japan is on the path to greater deregulation and is becoming more services-based so he is concentrating on stocks that exploit these opportunities.

Funds offer easy access to the four corners of the globe, to unlisted markets and to companies that require specialist knowledge. They remove risk and highlight it too when managers change tack, which means that funds aren’t as demanding of your attention as individual shares – managers will or should spot the oncoming threat and defuse it.

This year we have matched our annual selection of active funds to our Top 50 ETFs guide. It seems a more manageable number with just enough entries in different categories to provide a selection to choose from whatever style or objective you are seeking, whether that’s exposure to transformative growth companies, innovative and scalable businesses, small-caps and European microcaps, or even whether you are guided by thematic or geographic considerations. But we are always interested to hear reader feedback so please do email me your thoughts on our Top 50 Funds to


I’d like to answer two more questions from readers. First, how can investors calculate the 10-month moving average, something Chris Dillow frequently recommends as an invaluable tool, to decide if shares should be bought or sold? This can be checked easily on our website, in our data pages. Go to: – then, in indicators, look for a simple moving average, setting it to 10 months or 200 days.

Second, why do we use plastic wrapping to send out print copies of the magazine to subscribers, why not paper? Yes we still use plastic packaging for magazine delivery but the type we use is LPDE plastic which is fully recyclable although some local authorities will not permit this type to be included in household recycling bins. But many supermarkets provide collection bins for this type of plastic. We would like our packaging to be even more planet-friendly and we monitor options regularly. Cost is a factor with regard to using other types of recyclable material such as compostable, and paper, and costs here are likely to rise as paper supply issues (shortages) and rising raw material prices continue to push up prices, a trend that my colleague Arthur Sants has been regularly reporting on.