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FE adds 12 thematic funds to buylist

FE has added 12 thematic funds to its buylist to offer diversified exposure to macroeconomic trends.

The firm said on Tuesday that the funds cover seven sectors: financials, energy, commodities, consumer, technology, infrastructure and healthcare.

The funds are deemed by the research provider to be the best within each sector and not highly correlated to other funds on its FE Invest Approved List.

Diversification benefits

FE head of research Rob Gleeson explained: “Rather than covering a particular asset class, style or strategy, thematic funds focus on a sector or theme. This means that they often behave differently to general asset classes, so incorporated in a broader portfolio can offer additional diversification benefits.

“We believe that predicting the future is futile and that preparing portfolios for, and protecting them against, all scenarios is best practice.”

Funds added

Thematic sector Funds 
Commodities T Rowe Price Global Natural Resources Equity
Consumer Fidelity Global Consumer Industries

Morgan Stanley Global Brands

Energy Guinness Global Energy

Artemis Global Energy

Financials Jupiter Financial Opportunities

Polar Capital Global Insurance

Healthcare Polar Capital Biotechnology

Schroder Global Healthcare

Infrastructure Premier Global Infrastructure Income
Technology Axa Framlington Global Technology

Polar Capital Technology

Speaking about two of the funds added to the list – Jupiter Financial Innovation and Fidelity Global Consumer Industries – FE Invest fund analyst Sophie Meatyard said: “Jupiter Financial Innovation aims to benefit from the digital transformation of the financial services sector. The fund has a strong track record of investing in financials and the manager has proven his ability to pick winners versus his peers.”

She added: “Fidelity Global Consumer Industries, invests across the consumer staples and consumer discretionary industries on a global basis. Manager Aneta Wynimko has established a strong track record of stock picking and her ability to position the portfolio across the defensive staples, and sensitive discretionary sectors to benefit from different market conditions is impressive.”

FE’s methodology

FE picks funds for its buylist using a combination of financial assessment based on its FE Crown and FE Alpha manager ratings and manager meetings and research.

It said the performance of thematic funds is highly correlated to how the sectors they are most invested in perform, so additional weight is given to the qualitative overlay to avoid punishing funds for their sector’s performance.

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Sebastian Cheek

Sebastian joined Last Word Media in 2017 as editor of Portfolio Adviser. He previously spent 10 years as a journalist and editor in the UK institutional investment sector, most recently as editor...

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