Moneyspider in the News

Where will the smart money be invested in 2008?

Mature Times 

Forget commercial property, UK smaller companies and UK mid-caps, says online fund analyst Moneyspider.com in its prognostications for 2008. Instead, think corporate bonds, emerging markets - notably Russia - and equity income.

Russia is likely to be one of the top performing markets in 2008. And corporate bonds are likely to make a major comeback as shares in other sectors falter.

But it is Russia, with its cheaper stocks and a more open market than China with an emphasis on commodity stocks - backed by rising oil prices - that may well reward Isa investors over the coming year, predicts Moneyspider.com's Tony Ahearne.

"We anticipate that more of the smarter Isa money will be winging its way into funds like Neptune Russia and Greater Russia, but it should be remembered that these are higher risk funds and not for everyone.

"Investors in the commercial property market sector - those who can get their money out after the example set by Friends Provident, which has effectively now locked its investors in for the next six months - may well be looking for a more seductive option.

"Anyone still wondering whether it is worth hanging on to commercial property should, in our view, seize any opportunity they can to get out as soon as possible. It is looking like 2008 will continue to be a difficult year in this sector with little relief in sight.

"But for those investors wanting to play it safer in the forthcoming Isa season, corporate bonds look likely to make a comeback. Shares have taken something of a pounding, but if you look at a fund such as Henderson's Strategic Bond fund, which has a Moneyspider 'A' rating and has risen by over 40 per cent in the past five years, then bonds would appear to be a good bet."

Ahearne adds that the UK smaller companies and also UK mid-caps are likely to wobble in 2008, given that many firms in these sectors will be exposed to a slowdown in the domestic economy.

"Energy, oil, mineral, water, gold and alternative eco funds are also likely to do well in 2008 as there is a strong demand and China and India in particular are territories likely to continue to prosper.

"Funds operating in these sectors are not for the squeamish, but for investors looking for a sexier Isa, the natural resources sector looks like it will continue to flourish."

"We also anticipate that UK Isa investors will be lured back to equity income funds, as the bad debts in this sector begin to take on more transparency. You can bet that the banks - which after all have vast resources - are going to do everything in their power to turn this  
sector around in 2008.

"And as share values have already fallen significantly, there could well be some bargain buys out there," he adds.

"Invesco Perpetual High Income had a pretty good year and was one of the few funds in this sector to make decent money under the guidance of star manager Neil Woodford. It has to be a hot tip for the forthcoming Isa season."

"Emerging markets were the success story of 2007, and we think there is a lot of steam left in this market for 2008. Investors should never put all their eggs in one basket, but a five to 10 per cent exposure in this sector would make for a sensible Isa holding," says Ahearne.

"The core Moneyspider.com mantra is choose the right fund manager, but make sure you are in the right fund.

"By maintaining a beady eye on performance not only of the fund and sector you're in but also funds and sectors from across the whole market, Moneyspider.com investors can see where the real profits are to be made."

The Moneyspider service, designed to appeal to the 'average' investor,  is a comprehensive yet easy-to-understand fund monitoring tool delivering - at no cost at all to the client - personalised reports, including valuations and ratings on each investor's individual fund,  
all updated on a daily basis.

Further details on the mechanics of Moneyspider.com can be found at the  
link below.