Here, we ask Bestinvest’s Jason Hollands and Wells Capital’s Chris Mayo to give their opinion on four of your more specialised choices:
Investec Enhanced Natural Resources
FE Trustnet reader "Phil" says he is in the process of reviewing two underperforming funds in his pension.
"I have 20 or more funds in a discretionary pension which I set up two years ago and recently it has improved considerably, but two of the funds are particularly disappointing: Investec Enhanced Natural Resources and GLG Japan Core Alpha Equity."
While the four crown-rated Investec fund is headed up by the experienced team of FE Alpha Manager Bradley George and George Cheveley, it has had a difficult period recently.
Since launch in May 2008 it has returned 15.62 per compared with 7.4 per cent from its composite benchmark, split 50/50 between the MSCI ACWI Materials and MSCI ACWI Energy indices.
However, over one and three years it has sustained losses of 4.83 per cent and gains of 0.74 per cent respectively, compared with gains from its benchmark of 0.49 per cent and 10.95 per cent over the same periods.
Performance of fund vs benchmark over 3-yrs
Source: FE Analytics
Hollands (pictured) says the market has been especially difficult for natural resources recently, with a slowdown in China dampening demand for commodities.
"However, we rate this fund highly given the strength of the team, relatively low volatility and flexible mandate, which enables the managers to take short as well as long positions," he said.
As FE Trustnet pointed out in a previous article, the fund is substantially less volatile than its peers.
Chris Mayo, investment director at Wells Capital, also likes the fund's ability to short, which allows it to profit from difficult markets.
The fund requires a minimum investment of £1,000 and has a total expense ratio (TER) of 1.68 per cent.
However, it also charges a performance fee relative to GBP Libor +4%, which came under fire from industry experts in an FE Trustnet article last year.
GLG Japan Core Alpha
Phil also expressed concern over the recent underperformance of Stephen Harker’s GLG Japan Core Alpha fund.
However, Hollands thinks the fund is positioned to take advantage of a revival in Japanese markets.
"Equity valuations in Japan are about as cheap as you will find in any developed market and well below longer-term trends," he said.
"Japan has suffered in terms of international competitiveness from the strength of the yen and weak political leadership over a number of years. However, with a new government elected on a clear majority, which has embarked on aggressive stimulus policies, the market is looking interesting from a re-rating perspective, but is not without risk."
"If you think Japan is undervalued and now has a catalyst to re-rate as result of a radical policy shift, then this fund should be well positioned, given the manager’s deep value style and focus on large caps. We rate Harker very highly."
The £882.9m GLG fund is a top-quartile performer over five and 10 years, more than doubling the returns of the IMA Japan sector over the last decade. It has also outstripped its TSE Topix benchmark over the period.
Performance of fund vs sector and index over 10 yrs
Source: FE Analytics
However, it has struggled over one and three years. Over the longer period, it has lost 5.83 per cent, while the sector gained 2.71 per cent and the index picked up 1.89 per cent.
Mayo says its investment style has not been suited to the way the Japanese stock market has performed in the short-term, but like Hollands, he thinks it is a good long-term bet.
"This is one for the long-term investor who is prepared to accept a higher level of risk," he added.
The fund was previously soft-closed due to concerns over liquidity, but has recently reopened to new investment. It has a TER of 1.66 per cent and requires a minimum investment of £1,000.
Pictet Global Megatrend Selection
"Dip666" expressed an interest in the little-known Pictet Global Megatrend Selection fund, which he believes "blends a number of interesting global strategic themes like agriculture, water, timber, biotech and security". He points out it has recently been added to Hargreaves Lansdown’s platform.
The FSA-recognised offshore fund, which has three FE Crowns, is headed up by Hans Peter Portner and carries a TER of 1.97 per cent.
Hollands says Pictet Asset Management is experienced in specialist investing, but says this approach only suits ultra-long term investors who can stomach a high level of volatility.
"Pictet is a leading specialist in thematic investing but this approach can lead to deviations against more traditional global indices," he said.
"We currently favour business generating above-inflation yields and therefore prefer the likes of Newton Global Higher Income for investors wanting a global equity fund."
Mayo adds the thematic view is better suited for long-term investors than for people who are nearing retirement.
"The portfolio offers exposure towards a number of themes, including consumer goods, healthcare and technology, and so therefore plays the long-term global demographic story," he said.
"The fund has outperformed its benchmark since inception and could play part of a pension portfolio for an investor with a long-term view, as these themes are not short-term investments."
According to FE data, Pictet Global Megatrend Selection has returned 68.86 per cent since its launch in October 2008, compared with 66.15 per cent from its MSCI World benchmark. It has been more volatile, however.
Investec Emerging Markets Local Currency Debt
FE Trustnet reader "Blueroseis" likes Investec Emerging Markets Local Currency Debt, which makes up 11 per cent of his pension. He says he has been impressed by the fund’s dividend payouts.
Hollands said: "There has been a flurry of fund launches in the emerging market debt space over the last year, largely down to institutional demand."
"Local currency funds entail considerable currency risk and can exhibit high levels of volatility."
"The Investec Emerging Markets Local Currency Debt fund is one we rate highly but should only be considered by investors willing to expose themselves to much higher levels of volatility than a developed market bond fund."
The £2bn Investec portfolio has four FE Crowns to its name and is yielding 5.74 per cent – significantly higher than many developed market bond funds.
The fund is headed up by FE Alpha Manager Peter Eerdmans and has delivered top-quartile returns over three and five years.
Over the longer period, it has returned 86.4 per cent, while the IMA Global Bonds sector made 52 per cent, according to FE Analytics.
However, the fund is considerably more volatile than its peer group.
Mayo says he is a big fan of Eerdmans’ portfolio.
"This fund not only offers the investor exposure towards the debt of emerging markets, which in many cases is in better shape than those in developed markets, but also has a higher yield than many UK and European corporates."
"However, the fund only invests in local currency debt and not US dollar-listed debt, so is not able to invest in the full emerging market debt universe and is susceptible to any currency fluctuations."
The fund requires a minimum investment of £1,000 and has a TER of 1.66 per cent.