ISA recommendations

Growth Investors - Medium Risk - Fidelity Managed International
Fund manager Dick Haberman adopts a two-tier approach to managing the fund, separating the asset allocation and stock selection decisions. Dick sets the overall strategy following an Asset Allocation Group meeting, tailoring the group's findings in accordance with the fund's benchmark and investment objective. Dick then delegates stock selection in each region to four specialist fund managers who are responsible for selecting individual companies for inclusion in the portfolio. This dual-level approach allows investors in Managed International to benefit from the expertise of many of Fidelity's most experienced investment professionals. US stock selection is the responsibility of John Muresianu. This portion of the portfolio has a broad market cap bias with a wide range of holdings. The European portfolio is managed by James Rutherford, a relatively conservative manager who does not diverge substantially from the benchmark. Jay Talbot and Robert Rowland manage the Japanese and South East Asia portions respectively, with both managers focusing on blue chip stocks. A solid choice with excellent sector and geographical diversification.

Growth Investors - High Risk- Aberdeen Global Champions
The fund, launched in October 2000, is managed by Katharine Garrett-Cox who was employed on the US desk at Fidelity after graduating from Durham University. In 1993 she was headhunted to join Hill Samuel to run their US assets, including their flagship American Growth fund. She took herself and her equity team to Aberdeen to manage Aberdeen's investments in North America. The fund aims to achieve capital growth through investment in global equities, with an original main focus on the US market (around a 75% weighting) but will look at opportunities in the UK, Europe and Asia. Essentially a thematic fund, Global Champions will be built around globalisation, innovation and communication, which are destined to be the major engines driving global growth and, consequently, shaping the investment world. Limiting its holdings to 50 to 75 primarily blue chip, large cap stocks, the fund will identify those companies that are destined to be global leaders in their specific industries.

Income Investors - Low Risk - Aberdeen Sterling Bond
Fund manager Phil Roantree manages sterling and internationally oriented fixed interest portfolios. There are a total of 16 fund managers in the Fixed Income team, each specialising in certain areas. Phil's speciality is investment grade corporate bonds, which constitute the major part of the Sterling Bond Unit Trust's investments. The fund aims for a high and stable income through investment in preference shares, convertibles, gilt's and other fixed interest securities in the UK. It is benchmarked against the FTA Government All Stocks index, although this should be considered as an indicative benchmark given that the fund mainly invests in corporates. The fund's objective is to outperform the benchmark in the long-term while minimising the additional amount of risk inherent in investments in corporate bonds. The current income yield is around 5.7 per cent. The fund holds only bonds which are investment grade (or which are deemed to be investment grade) and therefore credit considerations are less important than for higher yielding products. Key considerations in the process are the prospects for inflation and interest rates. The macroeconomic outlook is considered both by the fixed income team and in the forum of the monthly Investment Strategy Review meeting, in which all heads of Desks and the Group Strategist participate and a consensus outlook is formed. Both corporate and sovereign bonds are then assessed individually and a widely diversified portfolio constructed.

Income Investors - Medium Risk - Aberdeen Fixed Interest
Paul Reed heads the Group's fixed interest operation and has over 30 years' experience in this area of investment. He joined Aberdeen Asset Managers Limited in 1991. The objective of the Fund is to provide a high yield from a portfolio of soundly based preference and other fixed interest securities and gilt edged stocks. Aberdeen believes that in global high yield bond & convertible bond / loan markets, it can achieve substantially higher yields than standard fixed income funds while avoiding capital erosion. (ie. higher total returns) through a combination of top-down analysis of yield ratings and spreads, and rigorous credit analysis of issuers of corporate bonds, preference shares and convertibles to identify and exploit market anomalies. It also purchases the higher yielding debt (which must be sterling-denominated for Aberdeen Fixed Interest fund) of emerging markets countries to enhance returns where it believes the economic scenario is such that bonds present good value. Portfolios hold predominantly bonds rated B and above, and are also likely to contain a number of higher yielding investment grade bonds at any point. This fund is aiming for a high yield (currently 8.4 per cent) and only has around 30 per cent in investment grade. The rest of the holdings are in sub-investment grade or pref / convertible preference shares.

* High Risk Artemis Income Fund manager Derek Stuart is a founder member of Artemis. After graduating from Heriot Watt University Derek received his fund management training with Ivory & Sime. The aim of the fund is to generate capital growth and a rising level of income through investment in mainly UK companies. It aims to provide investors with a total return in excess of that of the FTSE Actuaries All-Share Index through a growing income stream as well as capital growth. The fund invests in those companies that have the growth in earnings and cash generation to pursue a dividend growth strategy. Whilst high absolute yield will be used as a valuation indicator it is not the funds intention to offer a high yield relative to the UK stockmarket. The investment style remains consistent to the Artemis philosophy of focusing on sectors with momentum and on stocks within those sectors that offer the potential for significant re-rating. The fund's portfolio contains only the best opportunities the managers have identified, within a rigorous risk control framework and with detailed evaluation appraisal. It will typically hold about 50 securities. No one holding will represent more than 10% of the portfolio and holdings will generally be below the 5% level. The current dividend yield is around 2.5 per cent.

Pat Connolly, Chartwell Investment

First time investor - Foreign & Colonial Investment Trust
First time investors are advised to choose diversified funds for their first equity investment, and they do not come much more diversified than this trust. It invest in a large number of stocks, in various sectors and based all around the world. The charges on this are very low and the track record is fairly solid.

First time investor - HSBC Growth & Income
This fund invests in the UK, with most of the investments usually in larger companies. The fund manager, Tim Russell, is one of the most respected managers around and he does produce consistent performance with a relatively low level of volatility.

Experienced investors - Standard Life UK Smaller Companies
The UK is our favoured market and in that smaller companies are our favoured sector. The UK economy is the most robust of the major economies, and smaller companies will derive most, if not all, of their income from the UK. They are also currently an undervalued sector. The Standard Life team is one of the best around and they have the research resources available to maintain strong performance.

Income investors - Standard Life Corporate Bond Fund
Standard Life are on of the most experienced corporate bond managers in the UK and this particular fund has built up a very consistent performance record. The yield is only 4.8%, this being due to the fact predominantly invests in very secure bonds.

Income investors - Norwich Union Higher Income Plus
This fund invests in a combination of investment grade and high yield bonds, and as such offers a yield of 7.6%. Norwich Union dedicate huge resources to managing bond funds and this has helped them produce strong performance across their range of bond funds. The fund also benefits from low charges, meeting the CAT standard criteria.

Jason Hollands, Bestinvest (Brokers) Plc

Investing a full £7,000 in shares and bonds and wanting a balanced portfolio bestinvest recommends a portfolio that contains a blend of bonds/equities which should generate a mixture of income and growth. "The equity exposure concentrates on blue chip shares while the bond component has a high yield bias reflect our view on the attractions of the sector," says bestinvest.

To construct this portfolio they recommend
£2,000 in the Merrill Lynch High Income Bond
£1,500 ABN Amro UK Selected Opportunities
£1,500 Newton Income
£1,000 Invesco Perpeptual Monthly Income Plus
£1,000 Fidelity Managed International

A medium risk growth portfolio - with some exposure to smaller companies and mid caps in the UK made up with the following funds using a fund supermarket:

£2,000 Investec European
£1,500 ABN Amro UK Selected Opportunites
£1,500 Artemis UK growth
£1,000 Credit Suisse Transatlantic
£1,000 Schroder Tokyo.

For income among the funds they recommend are Aberdeen High Yield Bond and ABN Amro Equity Income.