Analysts at Hargreaves Lansdown have added Ninety One Diversified Income to the firm’s Wealth List – a select group of funds they deem to have the ‘greatest performance potential’ available on the market.
Senior investment analyst Hal Cook said the £845m fund would make the perfect addition for cautious investors looking for a defensive income option thanks to its bond-heavy portfolio.
Wary investors who might have dialled down their risk in the volatile market conditions of recent years may see the fund as “a step up in risk from cash,” and appeal to those looking for both “capital preservation and total returns,” according to Cook.
“We think this would be a great option for investors looking to supplement their retirement income, or for more cautious investors looking for an alternative to cash as rates fall,” he added.
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The portfolio is dominated by bonds – developed market sovereigns alone account more than half (55%) of all allocations – but it has a 10.2% exposure to equities that helps drive returns.
This mixed allocation means the fund’s ups and downs are often half of that of the wider UK market, delivering a much more stable performance than most, according to Cook.
“We think the fund could provide diversification to an investment portfolio focused on growth or be a useful addition to a portfolio focused on providing an income,” he said.
The portfolio itself may have its appeals, but Cook said it is his conviction in manager John Stopford that steers his promotion of the fund onto the Wealth List.
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Stopford has led the fund since 2012, during which time the fund climbed 52.9% – 13.1 percentage points higher than the IA Mixed Investment 0-35% Shares sector’s average return of 39.7%.
After 12 years at the helm, Coom said Stopford has attained “vast experience in bond investing,” adding that the “cautious nature of his approach and focus on investing for income” is a key appeal.
His co-manager Borbora-Sheen, who joined Stopford in running the fund in 2019, is also held “in high regard” by the Hargreaves Lansdown team.
The addition of Ninety One Diversified Income makes it the 70th constituent on the Wealth List, but only its second multi-asset income fund, joining alongside Baillie Gifford Sustainable Income.
