With that in mind FE Trustnet asked financial advisers for trustworthy products that they would feel comfortable recommending to new clients. Tim Cockerill, head of collectives research at Rowan Dartington, would go for AXA Framlington Select UK Opportunities and Liontrust Special Situations.
"I would call these funds trustworthy, because I don’t think they will let you down in terms of capital performance."
"I think for the first-time investor you want funds that are not going to surprise you in a bad way," he said.
"These are both well-run and diversified portfolios. If you were to hold these funds over a long period I would expect an investor would do very well."
AXA Framlington UK Select Opportunities
According to FE Analytics, the five crown-rated AXA Framlington UK Select Opportunities fund boasts top-quartile performance over three, five and 10 years.
The £3.2bn fund is the fourth-best performing fund in the IMA UK All Companies sector over 10 years. It has returned 232.24 per cent over the period, beating the IMA UK All Companies sector by 109.35 percentage points.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
The fund is headed up by FE Alpha Manager Nigel Thomas, who also manages the AXA Framlington UK Mid Cap portfolio.
It is tipped towards well-known blue chip names and features GlaxoSmithKline, Rio Tinto and Vodafone in its top-10 holdings.
It has a total expense ratio (TER) of 1.56 per cent and a minimum investment of £1,000.
Liontrust Special Situations
The £550.1m Liontrust Special Situations fund is co-managed by FE Alpha Managers Anthony Cross and Julian Fosh.
Since the launch of the five crown-rated fund in November 2005, it has been a top-quartile performer over one, three and five years.
It is the second-best performer in the IMA UK All Companies sector over three and five years, behind Mark Slater’s MFM Slater Growth fund.
Over five years, the fund has returned 71.9 per cent while the FTSE All Share index and sector have returned 10.69 per cent and 6.96 per cent, respectively.
Performance of fund vs index and sector over 5-yrs
Source: FE Analytics
The fund is significantly underweight in financials, with a higher exposure to industrial stocks than the IMA UK All Companies sector. It also holds a nominal portion of its assets in fixed interest to dampen volatility.
Liontrust Special Situations has a minimum investment of £1,000 and a TER of 1.92 per cent.
JOHCM UK Opportunities
Andrew Merricks, head of investments at Skerritts Consultants, believes the management team at JOHCM UK Opportunities makes the fund a standout choice for first-time investors.
"In John Woods, you are in safe and sturdy hands. I don’t think it will ever shoot out the lights but it is a very good fund," he said.
JOHCM UK Opportunities has been headed up by FE Alpha Manager John Wood since its launch. Over 10 years, he has returned 158.91 per cent compared with 100.03 per cent from his peer group composite.
The five crown-rated portfolio is a top-quartile performer over three and five years. It has also been less volatile than the IMA UK All Companies sector over these periods.
The £993.4m fund is significantly underweight cyclical sectors, such as financials, which have performed well in recent months but suffered over longer periods.
JOHCM UK Opportunities has a TER of 1.29 per cent and minimum investment of £1,000.
Schroder ISF Asian Total Return
Merricks believes that investors who want to branch out away from UK equities should seriously consider Schroder ISF Asian Total Return.
"With the Schroder Asian Total Return fund you are buying into the profitable Asia growth story but with reduced volatility."
"It has been a staple fund in our model portfolios for quite some time now."
Schroder ISF Asian Total Return is domiciled in Luxembourg and has $1.7bn worth of assets under management.
It is co-managed by Robin Parbrook and King Fuei Lee and has beaten the MSCI AC Asia Pacific ex Japan index over one and three years.
Over three years, the fund has returned 54.29 per cent while its benchmark has made 28.32 per cent.
Schroder ISF Asian Total Return's largest regional weighting is in Hong Kong.
The portfolio has a minimum investment of £1,000 and a TER of 2 per cent.
BlackRock UK Income
Merricks also likes the Blackrock UK Income fund due to the way in which its managers invest their own money into the portfolio.
"The BlackRock UK Income fund is another good portfolio. It is quite a big fund now but they can re-invest their dividends for healthy yields," he said.
"I particularly like the fund because the members of the management team have their own money in it, which I always think is a good touch because their own capital is at stake."
According to FE Analytics, the £672.6m BlackRock UK Income fund has returned 125.50 per cent over 10 years compared with 120.38 per cent from its IMA UK Equity Income sector and 107.99 per cent from its FTSE All Share benchmark.
Performance of fund vs sector and index over 10-yrs
Source: FE Analytics
The fund, launched in 1984, is currently headed up by Nick McLeod-Clarke and Adam Avigdori.
BlackRock UK Income holds corporates that are popular with other funds in the IMA UK Equity Income sector in its top-10, such as Vodafone, Royal Dutch Shell and British American Tobacco.