The Share Centre has added three growth and three income focused UK active funds to its Platinum 120 list claiming they sought “an advantage over index trackers” as market uncertainties mount.
Only this month the FCA expressed concerns on investment brokers who recommend third party funds, or in-house funds on ‘buy lists’ as some of these did not perform better than market indices, when taking into account charges.
But The Share Centre points out that it provides a separate list for ETF investments.
The retail stockbroker is recommending the following funds:
· CF Miton UK Smaller Companies fund
· GAM Star Credit Opportunities fund
· Franklin UK Mid-Cap fund
· Invesco Perpetual UK Strategic Income fund
· Legal & General UK Special Situations fund
· Rathbones Ethical Bond fund
The Share Centre investment research manager Sheridan Admans says L&G fund manager Richard Penny’s “value and contrarian style” makes “effective use of managing a concentrated unconstrained fund”.
For income investors, Admans recommends the GAM Star Credit Opportunities fund, the Rathbones Ethical bond fund and Perpetual UK Strategic Income fund as “inflation proofing”.
Admans says: “Further to the global additions made to our preferred range of funds list last week, The Share Centre is pleased to be adding some UK asset managers to our Platinum 120 range for investors that prefer, or want some, UK exposure in their portfolios.
“In the low growth world we are currently in, combined with the uncertainty surrounding the outcome of Brexit negotiations, active fund managers should be able to seek out an advantage over index trackers, as they can cherry pick the stocks and sectors they believe should outperform in the future.
“We believe that the UK growth managers [in the selection] can do just that and help navigate investors through the challenging market conditions ahead.”
Last week, the company added a number of international funds to the list including the Fundsmith Equity fund and two Polar Capital funds.
Similarly, rival giant stockbroker Hargeaves Lansdown has selected three funds which “could be a great choices for this year’s ISA”, citing the AXA WF Framlington UK, the EdenTree Higher Income fund and the firm’s HL Multi-Manager Special Situations Trust.
The Share Centre did not address the FCA’s general criticism of buy lists that focus on active managers.
Recommendations such as Share Centre’s Platinum 120, Barclays Stockbrokers’ Fund List and Charles Stanley Direct’s Foundation Fundlist are within the FCA study radar as very influential for DIY investors although they have not been named.
The study has also pointed out most fund buyers or stockbrokers don’t give enough weight to passive buy lists compared to active ones.
A Share Centre spokeswoman tells Fund Strategy: “All our preferred range of tracker funds, unit trusts and ETFs can be found on our website under preferred index trackers and preferred ETFs. Both of these lists have been launched in the past two years so we can offer customers a broader range of collective solutions to fit a range of their needs.”