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We name some of the top picks in the UK growth sector for your stocks and shares Isa allowance
UK growth funds are regarded as a good core for a portfolio, typically making up around 20pc
For investors who are looking for funds to buy as part of their Isa allowance it can be a bit overwhelming due to the amount of choice on offer, with over 1,500 funds available to British savers.
Here to help, we have asked a panel of respected experts to name their favourite funds across various investment sectors. The funds highlighted here are ideas. The funds highlighted here are ideas and any investment choice you make should fit your risk profile and other investments.
In this article we name our favourite UK Growth funds. These funds focus on companies that reinvest their profits in their business rather than paying out dividends to shareholders. Investing mainly in shares at home reduces exposure to currency risk. A sharp fall in the euro, for instance, would hurt holders of European funds.
It is for that reason that UK growth funds are regarded as a good core for a portfolio, typically making up around 20pc.
Use this chart to help you put their performance figures into context.
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Five-year return of average UK growth fund:48pc (blue line in chart below), turning 10,000 into 14,800.The FTSE All Share(shown in red line) has returned 40pc over the same period.
One of the top-performing fund over five years and also one of the best over three. The fund has undergone a change of manager this year, with Edward Legget leaving to be replaced by highly-regarded Wes McCoy. The underlying team that helps run the fund remains in place but well keep tabs to ensure it remains on track. It keeps its place on the list.
The fund has a history ofchopping and changingits stocks, so those not prepared for a bumpy ride should look elsewhere.
The ongoing charge is relatively high, at 1.15pc. Investors should pick the lowest-cost clean share class, which is P1.
Five-year return104pc, turning 10,000 into 20,400.
It is managed by Richard Buxton who is one of Britains best-performing stock-pickers over the past 10 years, although performance has slipped this year. The fund buys shares that are out of favour, such as banks, and it features on the core buy lists of several brokers.
The ongoing charge is 0.78pc and investors should choose the U1 share class.
Five-year return50.4pc, turning 10,000 into 15,040.
A fund that is investing in smaller businesses than its counterparts on the list. This area of the market has beaten larger companies, but the Axa fund has added some extra returns on top.
Experts like that manager Chris St John works alongside the hugely experienced Nigel Thomas. Current stock picks include Betfair, Rightmove and Auto Trader.
The ongoing charge is 0.87pc and investors need the Z share class.
Five-year returnFund launched in March 2011 and has returned 102pc, turning 10,000 into 20,200 isince then.
A riskier propositon because the fund, managed by Giles Hargreaves, invests only in companies below 250m in size, and many far smaller than that. Investors need to be comfortable knowing their money is in companies that are not household names.
Experts see the fund as best used sitting alongside a fund investing in larger, less volatile, areas of the market.
The ongoing charge is 0.79pc and investors should choose the P share class.
Five-year returnThe extra risk taken by investors has been rewarded and the fund is up 131pc, turing 10,000 into 23,100.
One of the oldest and largest investment trusts, it aims to unearth growing businesses that could one day become global giants. The fund currently has big bets on housebuilder Berkeley and Dominos Pizza.
Shares in the trust have traded at a consistent discount over the years and this is currently 10.6pc.
You pay just 0.5pc and the trust yields 2.41pc, which is lower than the FTSE All Share index but higher than some of the other funds on the list. The trust has the aim of increasing dividends at least with inflation, so this should underpin returns for investors. It has a low charge – 0.49pc.
Five-year returnThe share price has risen 104pc, turning 10,000 into 20,400
Managed by Alex Wright, this investment trust buys undervalued companies whose potential is underestmated by the market. Mr Wrights biggest holdings include major banks and oil major Shell. More than 15pc of the fund is invested in overseas companies.
The trust is currently at a narrow discount of 2pc after strong performance against the market this year. The fund charge is pricey, at 1.12pc.
Five-year returnThe share price has risen 99pc, turning 10,000 into 19,900