RIT Capital Partners : Where will the experts be investing their £20,000

Where will the experts be investing their £20,000?

Energy efficient lightbulbs. Starbucks coffee shops. Even guided missiles. Don't take the Isa plunge before asking…

BELEAGUERED savers who have tired of getting next to nothing from their bank can boost returns by investing in stocks and shares Isas. This tactic is only really suitable for those willing to leave their money untouched for at least five years.

You also need to be prepared to face the risk that you could lose money for the chance of higher gains. Once you've made your peace with that, it's time to choose your investments. That's easier said than done when there are thousands of funds to choose from.

To help with your selection, we reveal how five of Britain's top fund selectors would spend their £20,000 Isa allowance. Each of our experts suggests splitting the money equally between their recommended funds . . .

CASH IN ON THE BEST OF BRITISH

MARK DAMPIER, head of investment research at Hargreaves Lansdown DON'T split your

£20,000 between more than five funds, is Mr Dampier's advice. 'Any more and you risk doubling up on your holdings - which is a waste of time,' he explains. With more funds, you could have two or more investments in the same company.

Mr Dampier tips the Edinburgh Investment Trust, which holds lots of blue‐chip staples such as BP, tobacco firms and pharmaceuticals including AstraZeneca. It would have turned a

£4,000 investment - a fifth of your new £20,000 Isa investment - into £6,928 in the past five years. It's an investment trust, which effectively means you buy shares in the fund. Mr Dampier says these types of funds are good value at the moment.

He recommends the Standard Life Equity Income Trust to complement the Edinburgh trust. 'It invests in similarly large companies that offer attractive returns - but instead focuses on those more susceptible to ups and downs in the overall economy,' he says. One of its largest holdings is Sage, one of the world's largest payroll software companies. Other major holdings in the trust - which would have turned £4,000 into £6,980 over five years - are insurers Aviva and Prudential.

The emerging markets sector has been a favourite of Mr Dampier's since he started investing in the late Eighties. He says: 'With the boom of the middle classes in the developing world there is much potential for growth and rewards - you just need to be able to put up with some volatile market swings in the meantime.'

He would look at Templeton Emerging Markets, which has much of its money in China. You would have £4,800 back on a £4,000 investment over five years.

For those seeking a fund that does well in all markets, Mr Dampier suggests RIT Capital Partners, which he says is one of a kind. It invests in a huge range of different assets - individual stocks, other funds, hedge funds, even currencies. Another thing that sets it apart is that your money will be in good company. Jacob Rothschild, the fourth Baron Rothschild, invests £360 million of his own money in this fund. RIT shares are currently trading at

a price higher than the value of the assets it invests in. This premium to net asset of 4 pc means the fund is popular at the moment. It has returned £6,720 on a £4,000 investment over five years.

Mr Dampier's final choice is the Newton Global Income fund. It has around 46 pc invested in the U.S. stock market, though it is slowly adding European investments. For example, it now holds shares in H&M, a multi‐national clothing company from Sweden. A £4,000 investment made five years ago would now be worth £7,548.