The Unloved Funds Coming Up Roses

Editor's Views: Our Unloved Funds strategy has proved very lucrative over 25 years, why your credit score matters, and the dangers of buying Bitcoin right now

Holly Black 12 February, 2021 | 11:12AM
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At Morningstar, we talk a lot about value investing, being contrarians and looking at out-of-favour areas for opportunities. Well more than your average person does anyway. And while the theory looks all well and good on paper and I do pay heed to it in my own portfolio (I hold a UK smaller companies and a frontiers investment trust, among others), sometimes it’s not until you find a good ol’ chart showing you the magic that you really see the benefit. Which is why I loved the analysis this week by my colleague Valerio Baselli of Morningstar’s “Buy the Unloved” strategy, now in its 25th year.

In case you missed it, with this strategy you buy three equity funds – one from each of the three least popular Morningstar categories as denoted by outflows – and hold them for three years. Then sell and repeat the exercise.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk