New Best Funds List revealed: Bestinvest names the funds favoured by its investment research teams

As we edge towards the final quarter of the year, DIY investors looking to dust down their investment portfolios and blow out any cobwebs before the end of 2023 might want some guidance to help them along. Deciding where to invest your money from the thousands of funds, investment trusts and Exchange-Traded Funds (ETFs) available can feel overwhelming, particularly for those that don’t have the time or specialist knowledge to delve into the finer details of a particular fund.

That is why online investment platform and coaching service Bestinvest has unveiled the latest edition of its Best Funds List to help narrow the field and offer investors ideas to consider across a wide range of markets and sectors. With more than 3,000 investment options available to pick from on Bestinvest alone, it is natural for rookies, and even seasoned pros to be flummoxed by the dizzying array of choices.

Taking advantage of the expertise of the more than 300 investment management professionals at Evelyn Partners – one of the UK’s leading wealth managers with £54.9 billion assets under management and the parent company behind Bestinvest – the List outlines their preferred picks in each sector and typically includes a range of styles, both active and passive options as well as choices for investors wanting to include environmental, social and governance (ESG) considerations in their investment portfolio. The same funds are used within the wider Evelyn Partners managed client portfolios.

Looking at our latest batch of ‘Best Funds’, the list of 129 investments includes 31 listed investment companies and 15 ETFs and exchange-traded commodities (ETCs). This differentiates the Best Funds List from some other platform ‘best buy’ lists that typically only include open-ended funds. We think ignoring investment companies, which offer access to alternative asset classes such as property or infrastructure, or low-cost Exchange Traded Products puts investors at a disadvantage.

The good news is that our specialists have given fee-conscious investors a healthy set of options with the list including 28 low-cost passive funds, including both traditional index trackers, factor funds and ETFS and ETCs.

The list also includes 101 best-of-breed actively managed funds and investment trusts, where a fund manager must seek out market beating returns. These represent a tiny proportion of the plethora of funds available to retail investors, reflecting Bestinvest’s view that savers must be super selective when choosing actively managed funds because many fail to deliver over the longer term. A variety of different investment styles are included, to suit different market conditions. Those who don’t want their investments to clash with their values can also choose from 25 investments with sustainable, responsible or environmental, social impact and governance strategies.

Remember, for an investment to be included on the Best Funds List, we scour each sector carefully, whether UK Income or Emerging Markets, and when considering actively managed funds we apply a clear set of principles to each investment included in the Best Funds List.  Our ‘10 commandments’ (on page 6 of the report) detail the key qualities our investment teams seek out when choosing funds. These include having a clear process, favouring funds where the managers have invested their own money into the fund, taking a high-conviction approach rather than hugging the benchmarks and being prepared to limit the size of the fund.

Jason Hollands, Managing Director of Bestinvest, said: “Researching and selecting funds and trusts for an investment portfolio can feel very daunting even for the most dedicated DIY investor. Global challenges such as high inflation, rising interest rates and geopolitical issues can make it harder to pick the right funds that not only suit financial goals but also an individual’s appetite for risk.

“That’s why our Best Funds List offers DIY investors a snapshot in time of the best funds to invest in across each of the main sectors, helping to narrow down their choices to those we have researched in detail, grilling the managers in person to gauge what makes them tick.

“Each sector, whether it’s North America, UK Equity Income, Japan or Emerging Markets, typically has a dedicated team of half-a-dozen investment managers involved in researching and monitoring the investments available – that is a huge amount of time and expertise focused on to finding the right funds to feature in the Best Funds List.

“Our investment specialists not only meet the fund managers and scrutinise the numbers to fully understand the approach adopted, but also analyse the fund size, liquidity constraints and risk management process. Remember, basing an investment decision on past performance alone will not necessarily drive your investments forward, which is why careful analysis of the funds included on this list is so necessary.

“With 129 investment options on the latest Best Funds List across a wide range of sectors, investors will still need to decide what works for their own portfolio, time horizon, goals and risk profile – but we hope this acts as a starting point for those looking to spruce up their portfolios.”

The Best Funds List is published twice a year, but that does not mean it is static – with investments added or removed throughout the year. This can happen if a manager changes and we feel the replacement is unproven. Any alterations to our list are reflected instantly on the Bestinvest website. We also highlight which funds have been added or removed over the past six months to ensure List devotees can track the changes.  Details of the two newcomers and two dropouts can be found on Page 5.

The new Best Funds List comes hot on the heels of the latest Spot the Dog report, published last month, that named and shamed 56 consistently poor performing investment funds - horrible hounds holding £46.2 billion of investors’ wealth – more than double the £19.1 billion recorded in the report’s previous edition.

Of course, picking and monitoring funds is not everyone’s cup of tea, something Bestinvest recognises. We also offer a wide selection of Ready-made Portfolios, fully managed options for those wanting to delegate decision making. These include five low-cost Smart portfolios that invest through passive funds and ETFs, catering to different risk profiles and with ongoing costs starting at just 0.32% and a Bestinvest platform fee of just 0.2% pa.  Customers can also select one of Expert portfolios, which invest through best-in-class active managers and includes Sustainable options, or our Multi-Asset funds that invest directly in individual shares and bonds rather than funds.

Those looking to invest soon can take advantage of our attractive offers including our Autumn Cashback Transfer campaign, rewarding new and existing customers with up to £1,000 in cashback when they transfer accounts in full to Bestinvest (Terms and Conditions apply).  In addition, our Monthly Savers prize draw for existing Bestinvest clients rewards one regular saver selected at random every month with £250 in cash (Terms & Conditions apply).