Specialist funds focus on a wide variety of sectors. They help investors access niche areas, although they should usually only account for a small portion of your portfolio.
Specialist funds cover a broad range of themes, including:
- Energy - including major oil & gas producers, like BP, Exxon Mobil and Shell (formerly known as Royal Dutch Shell), as well as much smaller exploration and production companies
- Infrastructure - these funds often invest in companies that own or operate infrastructure projects such as roads, railways or airports, or those that supply utilities like water or power
- Resources - funds that typically focus on companies that mine commodities, such as iron ore, gold, copper or diamonds. They might also invest in areas such as energy and agriculture
- Agriculture - provides exposure to companies that grow food such as corn, wheat or rice. Some funds provide broader exposure by investing in companies in the food production chain like fertiliser producers, distributors, or supermarkets
- Technology - funds focused on technology companies
- Other areas such as financials, healthcare, biotechnology, and even artificial intelligence
Our view
The performance of specialist areas of the market tends to come in waves – when a particular area is in favour it normally benefits funds investing there, but the reverse is true too. This means you should be prepared to take a long-term view and accept the associated volatility.
Our analysis shows it’s difficult for managers investing in a specialist area of the market to perform better than their benchmark through good stock picking – the ability to invest in companies with great growth prospects, no matter what geographical area or sector they’re in.
Specialist fund managers are restricted on where they can invest, but managers that run more diversified funds can choose if and when to increase exposure to a specific area. We think a balanced and broader portfolio of funds is likely to provide enough exposure to areas like oil & gas, healthcare, gold, and agriculture. Managers of more generalist funds can add to or reduce their investments in these areas when they feel it is most appropriate.
We think investors who want to invest in a specialist area should ensure it forms a small portion of a diversified portfolio.
Investment notes
Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.
Wealth Shortlist Funds
Funds chosen by our analysts for their long-term performance potential.
See the Wealth ShortlistHere we provide comments on a selection of funds in the Specialist sector. They're provided for your interest but are not a guide to how you should invest. You should only invest if a fund fits your investment goals and attitude to risk. For more information, please refer to the Key Investor Information for the specific fund. If you're unsure if an investment suits your circumstances please ask for financial advice. These fund ideas are reviewed and updated periodically to ensure they match our latest views.
Remember all investments can fall as well as rise in value so you could get back less than you invest. Past performance is not a guide to the future. Investors should be aware that the funds highlighted below focus on a specific area, which makes them higher risk options, so should only form a small part of a well-diversified portfolio.
There is a tiered charge to hold funds on the HL platform. It is a maximum of 0.45% a year - view our charges.
This fund mainly invests in gold mining companies from across the globe. It also invests in companies that mine other commodities, such as silver or diamonds.
Evy Hambro's been at the helm of this fund for more than a decade and has more than 25 years of industry experience. He's got the support of an experienced, well-resourced team, which includes co-manager Tom Holl.
Hambro is confident in his long-term outlook for the gold price. He expects rising incomes in emerging markets to fuel demand for gold products, such as jewellery, while the absence of large gold discoveries could constrain supply and lead to a rising gold price.
We think this fund is a reasonable choice for exposure to gold and companies sensitive to the gold price. But its exposure to smaller companies and emerging markets makes it higher risk.
First Sentier Global Listed Infrastructure aims to deliver income and long-term capital growth by investing in companies from around the world that run or own infrastructure assets, including those in emerging markets, which adds risk.
The managers invest mainly in large companies including utilities, transport, energy and communications providers. Some utility providers, including water, gas and electric, are often able to pass on increasing costs to consumers, meaning some providers have held up well against rising inflation. People also need to heat and light their homes regardless of what's going on in the economy, so have the potential to hold up better than other businesses.
REITs, or real estate investment trusts, are also held in this fund. They invest in income producing properties, including cell towers, hotels, medical sites and warehouses. These can be an effective hedge against inflation because, for example, certain properties and landlords can increase rents in line with inflation.
While the fund contains a range of investments within the infrastructure sector, it’s concentrated. So each investment can contribute significantly to overall returns, but it can also increase risk. The fund’s charges are taken from capital, which can boost the yield, but reduce the potential for capital growth.
This fund aims to match the performance of the technology companies in the FTSE World Index. It invests in the shares of around 250 businesses.
This fund is fully replicated, so it invests in every technology company in the FTSE World Index. However, the fund’s top ten holdings make up over half of the portfolio. This means that a rise or fall in the value of an individual company can have a relatively large impact on the overall performance of the fund.
We think it’s a reasonable choice for broad exposure to some of the world’s leading technology businesses. Investors should be aware that the fund's investments in emerging market companies adds risk.
Latest research updates on funds in this sector
Legal & General Global Technology Index Trust: January 2024 fund update
Tue 06 February 2024
In this fund update, Investment Analyst Danielle Farley shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Legal & General Global Technology fund.
First Sentier Global Listed Infrastructure Fund: February 2023 update
Thu 16 February 2023
In this update, Investment Analyst Josef Licsauer shares our analysis on the managers, process, culture, cost and performance of the First Sentier Global Listed Infrastructure fund.
AXA Framlington Global Technology: February 2023 fund update
Wed 08 February 2023
In this fund update, Investment Analyst Josef Licsauer shares our analysis on the manager, process, culture, ESG integration, cost and performance of the AXA Framlington Global Technology fund.
Legal & General Global Technology Index: November 2022 fund update
Thu 17 November 2022
In this update, Passive Investment Analyst Alex Watkins shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Legal & General Global Technology Index fund.
AXA Framlington Global Technology: January 2022 fund update
Fri 28 January 2022
Investment Analyst Josef Licsauer shares our analysis on the manager, process, culture, cost and performance of the AXA Framlington Global Technology fund.
Fund research
Our expert research team provide regular updates on a wide range of funds.