'Global Funds for My Trip of a Lifetime'

Investor Views: Private investor Derek Jones is hoping his ISA will fund some worldwide travel when he retires

Emma Simon 19 May, 2021 | 11:48AM
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Investor views series piggy bank

Pub landlord Derek Jones is hoping his Isa portfolio will fund some worldwide travel when he retires.

Derek, who lives in Gloucestershire, began investing around 25 years ago after a pub regular suggested he put money into shares.

He says: “I needed my money to be working harder and investing seemed to be more financially rewarding than simply keeping my money in the bank.

“A friend recommended unit trusts to me, and I have not looked back. I have now built up a relatively large Isa pot.”

Derek, who is 59, tries to invest into his Isas every year. “I tend to invest lump sums whenever I can. I can’t always invest the maximum but I always have a good go.”

In recent years the Isa allowance has increased significantly and investors can invest up to £20,000 a year into these tax-efficient accounts. Derek invests in a broad range of funds from across the globe.

“I have money in India, Japan, America, Europe and of course the UK. The funds always seem to perform well over time, but not always at the same time. I try to keep a long-term perspective as they all seem to go up in value eventually.”

Globally Focused Funds

Derek, who has his Isa with Chelsea Financial Services, has invested in a range of funds, but his main holdings currently include Slater Growth and Rathbone Global Opportunities. He is also invested in the Bronze-rated investment trust, Baillie Gifford Japan (BGF).

Slater Growth has a global remit, but mainly concentrates on UK shares, with almost 90% of the fund currently in the UK market. This is a fund that focuses on smaller companies as potential drivers of growth: the fund is benchmarked against the FTSE Small Cap (ex investment trust) index and has a Morninstar Quantitative Rating of Silver.

It aims to deliver capital growth over the longer term and will focus on shares that manager Mark Slater believes are currently undervalued.

According to Morningstar data it has delivered annualised returns of 13.79% over 10 years, and 15.49% over five years.

Meanwhile Rathbone Global Opportunities has a Morningstar Analyst Rating of Silver and a 5-star rating, reflecting its strong outperformance in recent years.

As the name suggests this Rathbones fund has a global remit. Morningstar analysts says: “We continue to consider [this fund] a great option for investors seeking exposure to high-growth, all-cap global equities.” They also have a strong conviction in the fund’s manager to add value for investors over the long term.

Over the past five years the fund has delivered annualised returns of 18.72%.

Derek hopes to travel when he retires and wants to be able to draw an income from his Isa portfolio to help fund day to day living expenses. Given the previous performance of many of his funds, Derek doesn't think this should be a problem.

Over the couple of decades he has been investing Derek says he hasn’t had any real disasters with his ISA, although returns have sometimes been volatile.

Buy-to-Let-Hassles and a Refurbished Pub

Other investments have proved to be more tricky though. Derek has a property which he inherited and subsequently rented. “This has been a massive hassle if I am honest because I’ve had some bad tenants and have to sometimes travel up to the north of England to try to sort it out.

“In hindsight I wish I had sold it, but it seems to be doing OK at the moment.”

Derek has also bought, refurbished and opened a local pub which has proved to be a “very challenging investment”.

“This was a very stressful project although I had a return on my investment within three months and had a extremely profitable return over the next two years. But I do sometimes wonder if it was worth it. The pub has been closed due to the coronavirus pandemic. We don’t have a large outside area, so I haven’t been able to take advantage of the outdoor opening rules. I am hoping my customers will now come back as we are able to open again.”

Despite these setbacks, Derek remains optimistic about the future. He hopes to retire within the next three years then head off. Plans include travelling the coast of Scotland, visiting northern Spain and the Italian islands and then on to an extensive stay in New Zealand.

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

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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