The beginning of a new year routinely prompts investors to wonder what lies ahead – and prospects for growing their wealth. Each year, we look at a small number of fund ideas that investors could consider when thinking about where to invest for 2025 and beyond.
Will Hobbs, Head of Multi-Asset Wealth at Barclays UK Wealth Management, said:
“The outlook for 2025 is the same as every other year from a similar vantage point – profoundly unknowable. But it’s possible to identify the opportunities – and visible threats – for investors to consider for the year ahead."
“Investors could consider long-term trends such as artificial intelligence (AI) as part of their strategy for 2025. We expect that AI spending will continue at current massive levels. Though simply assuming recent winners will inevitably continue winning has often proved a mistake."
“US technology giants have driven much of the US and global stock markets impressive run this last decade or so. But these stocks are now richly valued, while their collective dominance is conceivably challenged by stricter regulations and new technologies. There is sense in maintaining exposure to other parts of the world, even if this incredible stretch of American dominance continues.”
“The next AI breakthrough may come from improvements in algorithms, which may not inherently favour the tech giant over minnow companies in this space, some of which are in Asia as well as the US.”
Here are four funds to consider that could help you capture some of the prominent investment themes and opportunities we have discussed, as part of a balanced portfolio, in 2025 and beyond.
Franklin Templeton India
This fund invests in Indian companies that combine quality and sustainable growth characteristics at what the managers believe are reasonable valuations. The fund identifies attractive investment opportunities which have recently been in Indian banks, consumer discretionary and industrial sectors.
This fund is a good option for investors that want to diversify their portfolio and allocate a portion of their portfolio to an exciting developing nation with potential for growth in domestic capital markets, digital transformations, and favourable demographics.
Barclays Global Access UK Opportunities Fund
The fund invests across the whole UK market and switches its focus depending on where the manager identifies the best opportunities.
The UK market is focused on sectors such as financials, consumer staples and healthcare, which automatically diversifies away from the dominating technology sector for those who have plenty of US holdings.
The fund offers exposure across all sectors and company sizes within the UK, and blends growth and value stocks which helps the fund perform in various market conditions.
Exposure to the UK through this fund can help diversify and protect a portfolio against any disruptions to the US or the tech sector.
Fidelity Index World Fund
A global fund can help with diversifying globally. This tracker fund tracks the performance of the MSCI World Index and offer global equity exposure to develop nations across the US, Europe and Asia. The fund predominantly invests in large/mega cap stocks.
This fund is an option for investors who want to diversify their portfolio globally and avoid betting too heavily on one trend, country, or asset class. As a passive fund it also offers low-cost access to these markets.
Polar Capital Global Technology
This fund specialises in technology shares which benefit from the emergence of generative AI. It maintains a large emphasis on the ‘Magnificent 7’ stocks, but it also offers exposure to the smaller, more innovative companies in the technology space. These are the firms that can outperform those larger companies with very high valuations.
While this fund featured in our ‘four funds for 2024’ article in January last year, it appears again because of its specialist approach which stands to gain from the ongoing developments of AI.
Investing in these funds may not be right for every investor. Investors should ensure that the fund’s objectives are aligned with their own before investing and that any new investment forms part of a diversified portfolio. Find out more about diversification.
