3 Funds For Your Stocks & Shares ISA

This week on Morningstar.co.uk, we're dedicating the lion's share of our content to ISAs. Morningstar's manager research analysts have picked three different funds that you could consider for your ISA portfolio ahead of a new tax year on 6 April

Morningstar Analysts 26 March, 2024 | 8:41AM
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M&G Global Dividend Fund Sterling

• Morningstar Medalist Rating: Silver
• Morningstar Category: Global Equity Income

A strong option in the Global space is M&G Global Dividend fund, which has a Morningstar Analyst Rating of Silver. It has been managed by an experienced investor Stuart Rhodes since July 2008. Rhodes has navigated the strategy well through different stages of the economic cycle and adhered to his investment philosophy and convictions when facing headwinds. He sometimes goes against the grain, but has demonstrated his stock-picking talent over time. Owing to the focus on dividend growth, the portfolio's yield is typically lower than for peers or the MSCI World High Dividend Yield Index while also displaying a milder value tilt versus competitors. Rhodes selects a compact portfolio of 40-50 stocks through bottom-up fundamental analysis where he has put more emphasis on financial leverage in recent years. The track record built by Rhodes points to strong total returns, beating peers and the index by a comfortable margin.

Lena Tsymbaluk, associate director, equity fund research

JPMorgan Global Bond Opportunities

• Morningstar Medalist Rating: Silver
• Morningstar Category: Global Flexible Bond - USD Hedged

JPMorgan's Global Bond Opportunities strategy benefits from an experienced management team, the firm's wider resources, and a flexible and nimble investment process. JP Morgan's global fixed-income chief investment officer (CIO) Bob Michele and international fixed-income CIO Iain Stealey co-manage the strategy, backed by a well-resourced and experienced team, including three comanagers. The strategy aims to maximise total return with a 5%-10% volatility target, which allows the team considerable flexibility in investing in a variety of sectors, such as high-yield and investment-grade corporates, emerging markets, and securitised debt. Over the years the managers have proven their ability to proactively reduce risk and modify exposure levels in market stress periods, while also participating in the upside for risk assets during benign markets. The strategy has outperformed its Morningstar Global Flexible Category peers in absolute and risk-adjusted terms since its inception in 2012.

Macro decisions are the dominant driver of the process. The co-managers and sector team heads debate the macro environment at quarterly meetings, which define the team's top-down investment road map. During the weekly sector team meetings, fundamental, quantitative, and technical research inputs are generated for every sector, which help fine-tune the asset allocation. Sector teams play a vital role in credit selection. The strategy's broad guidelines include a 75% limit to high-yield exposure, a sector in which the strategy has exhibited a heavy bias historically, albeit more tempered of late. Duration can range between negative two to positive eight years, but in practice it has never been negative.

Evangelia Gkeka, senior manager research analyst, fixed income

BNY Mellon Multi-Asset Balanced

• Morningstar Medalist Rating: Gold
• Morningstar Category: GBP Allocation 60-80% Equity

BNY Mellon Multi-Asset Balanced's focus is delivering competitive performance versus the Investment Association's Mixed Investment 40%-85% Shares sector. Manager Simon Nichols aims to achieve this primarily through security selection, with asset allocation also playing a role. Our increased conviction in lead manager Simon Nichols, supported by Newton’s multi-asset team and broader analytical resources, results in an upgrade in our People Pillar to High from Above Average.

Since taking over in January 2018, Nichols has shifted the risk profile from capital protection, to positioning that is more peer group- and benchmark-aware. Under his management the allocation to equities has typically been in the range of 70%-80% with bonds, cash, and some gold making up the balance. Overall asset allocation is driven by Nichols along with other senior members of the multi-asset team. Fundamental analysis is carried out by Newton's research analysts, who assess securities within a global context fitting their thematic views. We think Nichols makes effective use of Newton’s research platform. Despite a changing market backdrop, he has been able to generate consistently strong relative returns since taking charge of the fund. Nichols also has a strong track record on longer-running BNY Mellon Newton Global Balanced, which he took over in 2013.

Tom Mills, senior manager research analyst

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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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