AJ Bell Favourite funds: Why we removed this quality-focused global name

The Favourite funds list is aimed at lightening your research load. There are thousands of funds so we’ve narrowed the field by selecting a high-quality shortlist of funds we believe can deliver their objectives over the long term. To make the list, each fund needs to pass our robust, independent selection process.

What have we changed?

We keep the list under constant review to ensure we have the highest conviction in our selections, and to find new names with better potential to achieve their objectives.

As a result of this work, we’ve taken the decision to remove the IFSL Evenlode Global Income fund from our Favourite funds list. This decision reflects a fall in our confidence in the fund’s ability to deliver attractive long-term outcomes for investors.

The fund’s ‘quality’ investment approach involves looking for cash-generative businesses with strong competitive advantages that can grow their dividend over time.

This investment approach has been a hindrance to returns in recent years as the broader global stock market has favoured businesses with faster growing earnings (typically within the technology sector) as well as those starting on lower valuations such as energy companies and banks.

Many of these recent market ‘winners’ fall outside the fund’s quality investment approach, which, in hindsight, we believe may be too restrictive to compete against global equities through fluctuating markets.

What other quality funds are on the Favourite funds list?

For investors seeking income from global equities with a ‘quality’ approach, we continue to include strategies that take a broader view of quality, providing greater flexibility to navigate different market environments.