Funds can be a great way to invest within a Stocks and Shares ISA. With these products, one’s money is pooled together with the money of other investors and invested across a range of different companies. The result is broad exposure to the stock market at a relatively low cost.
Here, I’m going to highlight three funds that have good long-term performance track records. I see them as solid picks for an investor’s Stocks and Shares ISA today.
Fundsmith Equity
Fundsmith Equity is one of the most popular investment funds in the UK and for good reason. Since its launch in 2010, it has provided very strong returns for investors (around 15.6% per year).
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This fund is run by Terry Smith, who has a very strict investment process. A ‘quality’ investor, Smith only invests in companies that are financially strong, highly profitable, and resilient to change. Companies held in the Fundsmith portfolio currently include Microsoft, Estee Lauder, and Novo Nordisk.
One issue to be aware of with this fund is that it’s ‘concentrated’. It only holds around 30 stocks. This adds risk. If Smith was to pick the wrong stocks, it could underperform.
Given its great track record, though, I think it’s worth a closer look for investors. Fees are 0.94% per year through Hargreaves Lansdown.
1-year return: 2%
5-year return: 75%
CT European Select
European shares are often ignored by UK investors. And I think that’s unfortunate. Europe does have its challenges. However, it’s also home to many world-class, global companies. These can add diversification to a portfolio of UK/US shares.
One fund I like for exposure to Europe (and one I’ve invested in myself) is CT European Select. This also has a focus on higher-quality businesses. Top holdings at the end of January included Nestle, LVMH, and Pernod-Ricard.
Long-term performance here has been very solid. Over the last five years, it has returned nearly 50% (a higher return than most UK funds). Fees are 0.65% per year through Hargreaves Lansdown.
1-year return: 6%
5-year return: 48%
Fidelity Global Technology
Finally, for technology exposure, I like Fidelity Global Technology. I see it as a good way to play the tech revolution we are living through right now.
Through this fund, an investor can get one-click access to tech giants such as Microsoft, Apple, Alphabet, and Amazon. However, the fund also provides exposure to lesser-known tech companies such as Taiwan Semiconductor Manufacturing Company and Qualcomm, which both operate in the semiconductor space.
Performance here recently has been impressive. Over the last five years, the fund has returned roughly 20% per year.
Of course, tech stocks can be volatile. And there’s no guarantee the fund will continue to perform well going forward.
Overall, though, I think it has the potential to play a valuable role within a diversified investment portfolio. Fees are 1.04% per year through Hargreaves Lansdown.
1-year return: 3%
5-year return: 153%
