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Style-neutral funds for market rotations

Style-neutral funds can be a good way to offset market rotations
Style-neutral funds for market rotations
  • Active funds tend to focus on a particular style 
  • Not all funds lean fully into either value or growth and a few take a fairly agnostic approach
  • We assess some of the options including global and UK equities funds

Simplistic as it might seem, investment style considerations explain plenty of the shifts in investor portfolios from the past year or so. Cyclical shares have had a resurgence, led by some big moves in energy and financials, while quality growth portfolios have been through some big peaks and troughs. Quality growth shares have run into trouble this year in particular, bar a very recent recovery.

In such circumstances it’s hard to argue against the case for diversification by style, sector and geography. When it comes to the first of these, investors can pair the few remaining value funds with more growth-oriented names (see Funds to hold alongside Fundsmith Equity and Scottish Mortgage IC, 29.10.21) in the hope that the two balance each other out. This, however, might seem like a complicated and expensive way to achieve such balance.

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