When considering an effective portfolio, investors can often overlook the looming threat of inflation on their returns, which is a growing concern as inflation hit 2.9% in August.

If someone wants to maintain their standard of living, they need to get 2.9% return on their investment.

Ideally, investors should aim to get a return of more than 2.9% or they risk inflation eroding the real value of their income and lowering its purchasing power.

We have compiled some of top performing funds since the start of the year, according to data from Sharepad.

While these funds have outperformed in the past, there is no guarantee this will continue in the future.

PROFITING FROM UNDERDOGS

Among the best performers this year is Morgan Stanley Asia Opportunity Fund ZH.

The fund aims for long-term capital appreciation by investing in high quality, emerging firms that are believed to be undervalued.

It focuses on businesses in Asia, except Japan, and has delivered 53.2% total return. Chinese internet service portal Tencent Holdings and e-commerce giant Alibaba are the most recognisable names in the top ten holdings.

CAPITAL GROWTH THROUGH SMALL COMPANIES

Another fund that has performed well is Old Mutual UK Smaller Companies Focus Fund, which focuses on capital growth by investing primarily in a portfolio of UK smaller companies.

Top choices in the fund include fashion retailer Boohoo (BOO:AIM), software robotics specialist Blue Prism (PRSM:AIM) and Paysafe (PAYS).

The strategy appears to be paying off as the fund has delivered 49.1% total return in the year to date.  

EUROPEAN OUTLOOK

If you’re interested in stocks listed in Europe, Hargreaves Lansdown’s Jupiter European I Acc focuses on these companies to reach long-term capital growth.

The fund offers a diverse range of companies, with its top ten including Ryanair (RYA), Novo Nordisk and Bayer. In the year to date, the fund returned 25.7%.


Issue Date: 13 Sep 2017