Many people leave it too late to build pension wealth for their retirement, only to regret it later. The following five investment funds could help you build up a nest egg, to avoid gambling your future on the State Pension and triple lock.
The earlier you start investing for your future, the better, said Darius McDermott, managing director at investment platform FundCalibre.co.uk.
This can be hard when you are young and have other priorities, such as funding education and paying rent, while many have unstable jobs with flexible working and shorter contracts.
“Even if you don’t have much spare cash, saving something is better than nothing,” he said.
Investing is particularly important if you want any chance of retiring early, McDermott added. “The State Pension age is already 66 and will start climbing to 68 in five years time. It will only climb higher after that.”
These five funds could give you a decent retirement pot to fall back on.
SVM UK Opportunities. McDermott describes this as “a hidden gem in the crowded and highly competitive UK market”.
“It has been run by Neil Veitch since 2006, who is an extremely experienced manager with a great track record.”
SVM UK Opportunities holds top UK companies such as Lloyds Banking Group, National Grid and Prudential, and is up 41 percent over the past five years.
VT Downing Unique Opportunities. “This fund was only launched last year but is run by experienced manager Rosemary Banyard who looks for firms that have sustained competitive advantages, low debt and strong management,” McDermott said.
The fund is off to a strong start, up 34 percent in a year.
Capital Group New Perspective. This fund spreads your money globally, for even greater diversification. As well as the US, it invests in Europe, emerging markets and Asia-Pacific.
It targets some of the world’s largest multinational firms, including Microsoft and Amazon, Taiwan Semiconductor Manufacturing, PayPal and JP Morgan. The fund has returned an impressive 123 percent over five years.
Jupiter Strategic Bond. McDermott said it is worth balancing stock market holdings with a bond fund, which offer steady income and growth, but with low risk.
He describes Jupiter Strategic Bond as a flexible “go-anywhere” fund that has the freedom to exploit opportunities across global bond markets.
Investment returns are inevitably lower, the fund is up 21 percent over five years, but holding bonds can steady your nerves when stock markets are volatile.