Four funds for this year

12 January 2024

3 minute read

Will Hobbs, Head of Multi-Asset Wealth at Barclays UK Wealth Management, maps out what could impact markets this year.

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek professional independent advice.

The year of 2024 promises to be an interesting one for investors. There are undeniable challenges on the horizon but there will also likely be plenty of opportunities.

Will Hobbs, Head of Multi-Asset Wealth at Barclays UK Wealth Management, points to opportunities in the tech sector which he expects to have a large role in helping boost economic growth.

He said: “There have been tangible signs of a much-needed pick up in productivity growth. Indeed, its return could be decisive for investors. The rapid developments seen in generative Artificial Intelligence are among the reasons to be more optimistic than for the last few decades.

“AI could be something that can wake the world up from its productivity slumber.”

The US is also an important focus as US capital markets provide the drum beat for the world’s investments.

Hobbs said: “US elections will be hard to ignore given both the choice likely facing the electorate, and the country’s standing as the world’s most influential economy.

“However, it will be the long-term outlook for the US economy that will drive investment returns. Most of the time, that has very little to do with who sits in the oval office.”

Investors should stay true to their core investment strategies. To be diversified and to stay invested over the long term, even when there are short-term bumps, is what sets you up for a greater chance of success.

Here are four funds to consider that could capture some of the prominent themes we have highlighted, as part of your balanced investment or pension portfolio in 2024.

Polar Capital Global Technology Fund

Developments seen in generative Artificial Intelligence (AI) are among the reasons to be optimistic about the technology sector for the coming year.

This fund specialises in tech stocks which benefit from the emergence of generative AI. It has a large emphasis on the ‘Magnificent 7’ stocks – Amazon, Apple, Google parent Alphabet, Meta Platforms, Microsoft, Nvidia and Tesla. This fund owns 6 of these in its 10 largest holdings. While it looks to invest in a globally diversified portfolio of technology companies, the majority (74.6%) is invested in companies based in the US or Canada. This does however give some opportunity for growth in technological countries in Asia as they have 10.8% of their assets invested in Asia (excluding Japan).

Royal London Short Term Fixed Income

While many believe that UK interest rates have peaked, it is still thought that they will remain high in 2024 – especially in the early part of the year. In this sort of environment, investing in a fund that looks to outperform the Bank of England Sterling Overnight Interbank Average (a common benchmark used for interest rates here in the UK) will help diversify a portfolio by having some exposure to fixed income. Including bonds in a portfolio is key to being diversified. That’s because bonds behave in different ways to shares – they’re not tied to the stock market. So if there’s a market shock you will hopefully have a steady income from bonds to fall back on.

Barclays Global Access US Equity Fund

This fund looks to give a broad exposure to the US stock market. The fund is managed so that it has the potential to perform in all kinds of economic conditions. This may be favourable in 2024 with the uncertainty of a US recession still looming and uncertainty with interest rates – along with the elections to bear in mind.

Loomis Sayles U.S. Equity Leaders Fund

This fund (also listed under the naming TMNLS US Equity Leaders) looks to invest in a range of shares in US companies for the long term and tends to invest in founder-led companies as they believe that their leaders are motivated to think long term. Examples of these are Amazon (which the fund has invested in since 2006) and Meta which is currently the largest holding in the fund.

The fund looks for long term growth across all sectors in the US however has a large proportion invested in the tech space. This is due to the long-term growth prospects with the ever-developing tech space and the opportunity of these companies continuously evolving with new tech that is being developed continuously. Six of the top 10 holdings of the fund are one of the ‘Magnificent 7’ stocks which shows how this fund favours long term tech stocks in the US.

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