With ISA season fast approaching, I thought it would be a good time to review the funds in my ISA to see if they have passed muster.
The oldest holding in my portfolio is Fidelity Asia Pacific Opportunities, which I have owned since June 2022. It is also the worst performing relative to the other options I could have picked.
Since I bought it, the fund has made a paltry 3.2%, a bottom-quartile return in the IA Asia Pacific Excluding Japan sector. However, my returns are slightly higher at 5.7% as I have drip fed my money over this time. Still, so far it has been far from the high-risk, high-reward option I intended it to be.
Managed by FE fundinfo Alpha Manager Anthony Srom since 2014, the fund is a long-term hero, topping the sector over 10 years. It is also a top-quartile performer over five years. However, over one and three years – about the time I bought into it – the fund has hit a rough patch.
I still believe in the manager and the fund and think having exposure to China (and Asia more generally) is something I want in my ISA. This fund gives me a good option, even if returns since I have owned it have not been as strong as others in its peer group.
My other selections have proven better choices relative to their peers. The next-oldest fund in my portfolio is Rathbone Global Opportunities, headed by Alpha Manager James Thomson.
This is hardly an outside-the-box pick, as the fund is one of the most popular in the Investment Association universe. But unlike other big names who are going through some more difficult times, Thomson has remained at the top of the IA Global sector.
The £4.3bn fund has made 33.9% since it was added to my ISA in April 2023, although my returns have been slightly lower than this as I have drip fed my money. Overall the fund is up 25.9% in my ISA.
My most recent pick – WS Gresham House UK Smaller Companies – has been my worst performer. Despite being the fourth-best fund in the IA UK Smaller Companies sector since I added it to my ISA in April 2024, up 6.9%, I am actually down 1.5% over this time.
There are pros and cons to drip feeding money into funds as evidenced by the above. In some cases it can pay off, such as with the Fidelity Asia Pacific Opportunities fund, while in other cases it will dampen returns.
But I do not have a large sum of money sitting around, so drip feeding is my only option at present. As such, I will have to accept there are instances where it will pay off and times when it holds my returns back.
The above also highlights the issues with diversification. Although 45% of my portfolio is in the Rathbone Global Opportunities fund, my returns have been weighed down by the other two holdings in the portfolio.
Still, my ISA is there as a long-term investment and I hope that the mix of assets I have will create value over time – I just need my more adventurous picks to start paying off.