by Jennifer Hill from interactive investor, 14th February 2024:
Following the herd doesn’t tend to end well. Throughout history investors’ tendency for herd mentality bias has inflated asset bubbles and driven sharp declines detached from market fundamentals..
Trading on the interactive investor platform highlights half a dozen funds that have climbed the popularity rankings over the past year. Unsurprisingly, among them is a technology index tracker.
“The technology sector has been one of the predominant drivers of returns for the US, especially through the past year with returns heavily concentrated across a select number of mega-cap names,” says Alex Watts, an investment data analyst at ii.
Amid stubbornly high inflation in the West, other in-vogue funds focus on the Asia-Pacific and equity income – Asia for its differing inflationary dynamics and income for its potential to grow distributions at or above inflation.
These are all sensible areas to invest part of a diversified portfolio. We asked analysts and wealth managers to suggest alternatives to six trendy investment trusts and funds for free-thinking investors..
JPMorgan Global Growth & Income
This global equity income trust has grown significantly through several mergers in recent years, including Scottish Investment Trust, JPMorgan Elect and a potential upcoming merger with JPMorgan Multi Asset Growth & Income.
James Carthew, head of investment companies at QuotedData, suggests CT Global Managed Portfolio as an alternative. It has a much higher yield and less-volatile performance profile, reflecting its diversified portfolio and making it a “good option if you’re nervous about the direction of equity markets”, says Carthew.
“Because it’s a fund-of-funds, it has been hit by the general widening of discounts in the investment companies sector, but I think this trend is starting to reverse,” he adds.
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