Best funds to buy: Interactive investor drops five from its Super 60 list

With so many funds and mutual funds on offer, it can be overwhelming for the casual investor to figure out where best to put their money.

That’s why most investment platforms publish so-called best buy lists, which provide a shortlist of their favorites.

Interactive investor’s ‘Super 60’ list added three new funds in its most recent review, but dropped five after a rough year for the markets.

How have the ‘Super 60’ funds and trusts performed?

The platform describes the Super 60 as “a range of funds, mutual funds and ETFs that our team has hand-picked as quality options for your investment goals.”

Passive trackers performed well, with two of the top five performing companies in the Super 60 being ETFs with exposure to commodities.

WisdomTree Enhanced Commodity ETF performed well on higher prices, returning 27.34 percent over the year, while iShares Physical Gold ETC gained 11.98 percent.

Over the past five years, 77 percent of current active Super 60 voters have outperformed their industry peers, but short-term returns have taken a hit.

Just over half of the active managers on the list beat their peers last year, with just under three-fifths of their peers beating them over a three-year period.

Dzmitry Lipski, head of fund research at Interactive Investors, said: “Last year was a tough one for investors to navigate and our list of Super 60 ratings, with its mix of adventure, core, income, smaller company and low-cost options, was definitely not immune. We wouldn’t expect that either.

“The impact of geopolitical tensions, rising volatility, bond market chaos, rising inflation and creeping interest rates has been random.”

Mutual funds had a very bad year, with Scottish Mortgage leading the way as it suffered from significant exposure to technology companies.

‘More generally, many investment funds use gearing (borrowing) to increase returns. This has led to investment funds delivering above-average long-term returns compared to mutual funds,” said Lipski.

But over the shorter, more volatile periods, it can also magnify losses. So it’s important to take the rough with the smooth.’

Which funds have been removed?

Five funds failed to cut the Super 60 review, with reasons ranging from a team change to concerns about portfolio churn.

Mobius Investment Trust was the investment trust’s sole victim in the review, following “significant turnover within the team and a reduction in size and experience.”

The trust, which invests in emerging market small and medium-sized companies, had been a member of the Super 60 since late 2020.

Carlos Hardenberg’s wealth of experience and expertise is viewed positively, but the loss of a number of analysts since inception and the potential for key person risk mean that Morningstar, in conjunction with ii, no longer considers the fund to be an idea with the highest conviction. said the platform.

The Royal London UK Equity Income fund has been de-listed following the retirement of long-term manager Martin Cholwill in 2021 and ii feels there are stronger funds in the category.

Crux’s European Special Situations was dropped from the list because of “recent missteps in the pursuit of high-growth companies, indicating a lack of consistency in the process.”

The fund, which is managed by James Milne and Richard Pease, lost 11.1 percent last year, underperforming the broader IA sector.

The team also removed the IFSL Marlborough Multi Cap Growth fund after concerns about team resources and collaboration.

“Particularly given that this fund has substantial small-mid cap exposure, which requires a high degree of analysis and expertise, there were concerns about the size and collaboration of the team.”

ii also highlighted “increased churn,” which raised questions about the fund process and costs to the end investor.

Finally, the iShares Environment Low Carbon Tilt Real Estate Index fund has been delisted following a name change and investment objective change.

Formerly called the Global Property Securities Equity Index fund, it now tracks a low-carbon index.

“The benchmark change currently has a limited impact on index components, but this is expected to increase over time.”

Which funds have been added?

Artemis Income has been added as a core UK Equity Income option and while the value bias has been a headwind in recent years, ii said ‘it’s no more pronounced than that of the average UK Equity Income counterpart.’

Managed by Adrian Frost since 2022, the fund aims to outperform the FTSE All Share and provide growing income and dividend yield.

Last year, Artemis slightly outperformed the FTSE All share and IA sectors, and ii says it has delivered ‘excellent long-term relative returns’.

Janus Henderson European Select Opportunities has been selected as a Core European Equities option.

The fund is managed by John Bennett, who is “very experienced” and has “added significant value through stock selection.” The fund offers “valuable insights into the prospects of European companies and also looks for contrarian transactions.”

The fund’s December factsheet shows it lost 5.8 percent last year, while the FTSE All Share lost 6.98 percent.

For investors looking for an ‘adventurous’ UK stock option, ii added Fidelity Special Values ​​Ord investment trust.

The trust is run by “experienced manager” Alex Wright and is a “strong option for investors seeking a contrarian and value-oriented approach to investing across the market cap spectrum of the UK market,” according to the investment platform.