Seven funds that justify switch from cash

by Douglas Chadwick from interactive investor |

The Saltydog analyst has been sitting on cash for months, but these funds are delivering great results.

This content is provided by Saltydog Investor. It is a third-party supplier and not part of interactive investor. It is provided for information only and does not constitute a personal recommendation.

Stepping back into the markets 

Global stock markets had a difficult end to last year. 

As a result of this downturn, we reduced our exposure to the markets and significantly increased the cash holdings in our portfolios. This mainly took place during September and October - we then didn't really make any significant changes during November, December and January.

We did however make a few relatively small investments to 'test' the markets. Some were sold fairly quickly, after failing to get going, but a few are looking more encouraging. When we reviewed the portfolios last week, the following funds were showing reasonable gains.

Fund name Purchase date Performance
Investec Global Gold 20/12/2018 up 10.8%
Jupiter China 20/12/2018 up 7.6%
Neptune Latin America 10/01/2019 up 2.7%
AXA Framlington UK Mid Cap 24/01/2019 up 1.8%
Fidelity Global Technology 24/01/2019 up 6.0%
Investec UK Special Situations 24/01/2019 up 1.6%
Polar Capital Global Technology 24/01/2019 up 4.8%

Considering how badly some of these funds performed last year, these are impressive results.

Our philosophy at Saltydog is to look for the best performing sectors (taking into account their historic volatility), and then invest in the leading funds in those sectors.

We initially make a small investment so that we can cut our losses and move out quickly if things don't pan out as expected. If the fund starts well, then we can add to our holding and so help maximise the potential gains.

Last week we added to some of the funds that I mentioned earlier.

Since Christmas there's been a pickup in stock markets around the world. We were concerned that the recovery may have been short-lived, but, as time has moved on, it seems to have become more entrenched. 

The political issues surrounding Brexit, tightening monetary policy, and the American/Chinese trade war haven't gone away, but markets appear to have taken the view that things may end up better than the Domesday scenarios that were built into stock prices a few weeks ago.

Although the numbers look more encouraging than we've seen for some time, I'm far from convinced that the fundamental problems in the global economies have been resolved. It feels like the issues have just been kicked down the road again. Even so, that still means that there could be some more gains to be made in the short to medium term.

As long as funds continue to go up, we'll keep investing but remain prepared for a quick about-turn if necessary.

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These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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