- This topic has 3 replies, 4 voices, and was last updated 3 weeks, 3 days ago by Jackson Wong.
Hargreaves Lansdown has flagged these three funds as one’s to watch in 2026 – any views or better options?
1. Schroder Managed Balanced
2. Invesco Tactical Bond
3. JPM Emerging Markets
Here’s what they say about them…
Schroder Managed Balanced
With so many unknowns on the horizon, balance feels more important than ever. Investors have had to contend with fluctuating inflation, shifting interest rate expectations and sharp swings in stock markets, and that’s before considering the impact of politics, elections and global events. In this kind of environment, it can make sense to have an investment that’s spread across a range of assets. Multi-asset funds that blend shares, bonds and other investments aim to capture growth when markets rise while offering some shelter when they fall. They can also help reduce concentration risk, and the benefit of professional management means the portfolio can be rebalanced on your behalf.
The Schroder Managed Balanced fund is a ‘fund of funds’. The managers mainly invest in other Schroders funds, run by specialist teams investing in hundreds of different companies and bonds worldwide. This creates plenty of diversification across geographies, sectors and asset types. The team tends to favour shares when the economic environment looks positive. But in times of stress, they shift towards more diversified assets, including bonds, cash and alternatives, with the aim of minimising losses. They also have the flexibility to invest in thematic areas, such as gold, which can provide additional resilience.
JPMorgan Emerging Markets
Emerging markets have played second fiddle to the US in recent years, but that hasn’t always been the case and at some point, the balance could shift. Valuations in developing markets look appealing relative to their developed peers, and the long-term growth story remains intact. Many of these economies are supported by powerful structural trends, such as rising wealth and expanding consumer demand. A key factor to watch in 2026 is the US dollar. If it continues to weaken, as some expect, that could be good news for emerging markets. A softer dollar typically reduces borrowing costs for these economies and can encourage investment flows.
The JPM Emerging Markets fund is managed by experienced investor Leon Eidelman, supported by a network of more than 100 investment professionals across nine countries. This gives the team eyes on the ground in many corners of the market. The fund invests in major countries like India and China, as well as smaller regions offering unique opportunities, including the Middle East, Turkey and Mexico.
Invesco Tactical Bond
Bonds have endured a volatile period, but they remain an important part of diversified portfolios as they can offer income, defensive qualities and potential stability when equities struggle. Inflation has come down from its peaks, and many central banks are expected to continue cutting interest rates throughout 2026 – though a cautious approach is signalled. This broadly creates a more supportive environment for bond investors because, as yields fall, prices typically rise.
Still, the path ahead is unlikely to be smooth. Economic conditions are uneven across regions, and political developments could introduce more twists. In this setting, flexibility is key. Funds that can adjust their exposure to different types of bonds have the potential to make the most of opportunities while managing risk.
The Invesco Tactical Bond fund aims to do exactly that. The managers have freedom to invest across government, corporate, high-yield and emerging market bonds. Their approach is built on interpreting the wider economic picture and adjusting the portfolio accordingly. They aim to shelter the fund when they see tougher times ahead and seek stronger returns when opportunities arise. This flexibility removes the burden on investors to pick which areas of the bond market to focus on and when.”
Fund investing is a thorny subject the sad truth is that few actively managed funds will beat their benchmarks, in any given year and fewer still will manage to do that on a consistent basis.
Against that when you buy a fund you are outsourcing the management of your money to an expert/team of experts, in their field. And that appeals to many investors, who don’t have the time, inclination or expertise to do this for themselves.
That’s particularly true when it comes to niche areas such as Bonds and Emerging Markets.
Buying an index tracker, especially a low cost one that tracks US blue chip equities has been something of a no brainier post covid. However, the magnificent 7 haven’t really performed in 2025. And if we look at the markets that produced the biggest bang for buck this year (in US$ terms) then Korea, Greece, Spain, South Africa, Mexico, Italy and Brazil, all knocked the S&P 500 and Nasdaq 100, in to a cocked hat.
in terms of sector and asset class performance Banks, Telecoms. precious metals and the Swiss franc were among the top performers. And if the US dollar remains weak (dollar index is well below 100 and is down -9.48% year to date) then it seems likely to me that these trends could continue into 2026.
If you are looking for a contrarian trade/fund in which to park some of your portfolio then Indian Equities have underperformed their EM and DM counterparts, and remain just above their 200 D moving average.
Closer to home France may present an opportunity with French stocks having lagged peers in Germany, Spain and Italy during 2025.
To get the most from these ideas spending some time researching fund mangers with expertise in the sectors and geographies is probably a good use of your time.
Depends what you are looking for but as a growth/quality investor, I like the Blue Whale Growth fund. This is a concentrated, growth-focused global equity fund managed by Stephen Yiu.
Yiu is good at identifying growth themes and capitalising on them. For example, he’s made a ton of money for investors in recent years on the AI buildout theme.
Not only has he made a killing on Nvidia, but he has also done well with stocks like Broadcom, Lam Research, Taiwan Semi, and Vertiv (these stocks were all in the top 10 holdings at the end of November).
In terms of performance, the fund has a really good track record. Since its inception in 2017, it has returned about 220%. That translates to a return of around 15-16% per year.
This year, it returned 25.7% to the end of November. That’s well ahead of the S&P 500 and MSCI ACWI indexes.
I’ll point out that this fund can be quite volatile at times. When there’s market weakness, losses can be magnified due to its growth/technology focus.
In 2022, for example, when the market fell, the fund returned -27.6%. So, it may not be suitable for those seeking capital preservation.
If an investor is seeking long-term growth, however, I see this fund as a nice complement to a standard index tracker fund. It’s structured very differently to the average index tracker and has more growth potential in the long run.
Many good points made by Richard, Darren and Sheldon above.
In the realm of asset allocation, the ‘allocation’ part is often a key driver of long-term returns. The other important part is of course the funds themselves.
How much you invest in each asset class determine the overall returns. When investing in funds, investors have to answer:
a) Is the fund’s allocation matching their risk appetite? b) Is this allocation in sync with their long-term investment views?
Take the Schroder Managed Balanced fund, mentioned by Richard above. According to its factsheet, the fund holds 74 percent of its asset in Developed Market equities and another 5 percent on Multi-Asset income. Commodities allocation is a small 2.5 percent.
While diversification is a core principle that all investors should adhere to, is the fund over diversified? It may be.
If you, for instance, allocate 10 percent of your portfolio to the Schroder Managed Balance fund, which itself is spread over 10 asset classes, whatever you choose for the other 90 percent will most likely overlap with that fund.
Moreover, a fund-of-fund does not allow you, as an investor, to express your long-term investment views fully, since the fund determines the broad allocation mix.
If you wish to take a more active role in fund investing, perhaps sticking to niche, ETF-type funds may be more appropriate.
For instance, you invest a percentage in global equities (VEU), another percentage to US (SPY) and US Tech (QQQ), another percentage to UK (ISF) and Europe (MEUD) equities, and then a portion to either regional or single country equity ETFs; and then a portion to bonds (TLT, IGLT) and gold/silver.
Passive, indexed vehicles like ETFs have lower costs than traditional funds.
The last point when investing in funds is this: What do you do when the fund is doing poorly?
In finance, fashion comes and goes regularly. Economic cycles push some asset classes deep into the red at some point. Think of bonds in 2022/3. When this happens, do you add, trim or just hold?
On the other hand, if a fund is doing well, do you add, hold or sell?
Strategic decisions like this are as important as funds selection. There are many ways to build a portfolio of funds. Having a plan, however simple, is critical when managing a portfolio of funds.
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