Many professional investors are talking about European companies as an area that could do well in the next several years. The European Central Bank is rumoured to be preparing more support for the economy, which is chugging along and could do with some help. Whatever the effect its policy has on Eurozone economies, investors expect local stock markets will rise.
A good fund in this space is the Schroder European Alpha Income fund, says Andy Parsons of The Share Centre.
“As the European economy progresses through the phases of recovery, expansion, slowdown and recession, the fund’s holdings will be aligned with the companies that perform best,” he says.
FUNDS: UK INCOME
Regular income payments from an investment are a great way of growing a savings pot. The PFS Chelverton UK Equity Income fund is a well-regarded option for savers who want to invest in the UK’s smaller companies for their growth potential but still received a good level of dividends too. “The fund has three objectives – capital preservation, increasing dividend payments by the rate of inflation, and an increase in capital values,” says Jason Hollands of Tilney Bestinvest.
FUNDS: EMERGING MARKETS
Stock markets in Asia and other less developed countries haven’t been doing well lately, but on a 10 to 20-year timeframe those areas have great potential. The JPM Emerging Markets Income fund could be a good choice for investors wanting to have a portion of their savings in these regions, says Michelle McGrade at TD Direct.
“The fund manager seeks out companies where the share price does not reflect inherent value. The portfolio comprises a combination of high yielding companies and those which have the potential to grow their dividends over the long term, which is an approach I like,” she says.
SHARES: THE MIDDLEBY CORPORATION
This American company makes appliances for commercial kitchens, which includes everything from grills and ovens to packaging machines. It has become popular with restaurants as its designs don’t just cook the food, but reduce the overall costs of the business too. Management teams increasingly see Middleby’s equipment as an investment in a cheaper kitchen.
“Its products help restaurants to be more energy efficient, to cut labour out of the kitchen and generally take down the cost of operating a kitchen,” explains Alan Rowsell from Standard Life Investments.
SHARES: FEVER TREE DRINKS
Fever Tree is well-known for its premium priced tonics and other mixers. It has cleverly created a niche for itself, as the management realised there was a growing trend for higher quality gin and decided to offer tonics to match. The mixers sector has historically been dominated by Schweppes, and is worth billions globally. “Effectively, Fever Tree have created premium mixers as a new segment. It is only just scratching the surface in terms of growth potential in this marketplace,” says Andrew Paisley of Standard Life Investments.
SHARES: FINSBURY FOOD
A supplier of baked goods to cafes and restaurants, Finsbury Food was applauded when it acquired another bakery company, called Fletchers. This is one reason investors say it has great growth prospects.
“Current trading is solid,” says Graham Spooner of The Share Centre. “The cafe and convenience food service sectors have been growing steadily in recent years.”