ISA recommendations 2007

"This Fidelity fund ticks the right boxes on both counts. It tracks the FTSE All Share Index, which offers a slightly wider spread of investment versus the FTSE 100 and annual charges amount to just 0.3 per cent. This fund is a great starting point for novice investors, who might then supplement this with good actively managed funds as they become more experienced."

Experienced investor: Artemis Global Growth.

"This fund is a good option for investors wishing to diversify their portfolio away from the UK. A former 'dog', the fund bounced back to form following a manager change in December 2003. The new manager, Peter Saacke, has comfortably beaten the MSCI World Index since then and the fund is still relatively small, so we have no concerns that it will become unwieldy medium term.

"Because Saacke is primarily a stock picker and has good scope to deviate from the Index, there is ample opportunity to continue outperforming. While this may lead to volatility at times, it does give him an edge over some peers. Rather than meeting with companies, Saacke uses complex in-house computer analysis called SmartGARP to highlight stocks that look like good buying opportunities.

"The system analyses over 2000 companies for growth prospects, value for money, whether earnings are likely to improve and momentum (i.e. is the stock's trend up or down). The fund is well diversified globally, with a bias towards the US and Europe.

Investors looking for income: Midas Balanced Income.

"Sensible diversification makes this fund a great 'one-stop shop' for income investors. The manager, Alan Borrows, used to run the Merseyside Pension Scheme and has plenty of experience of running this style of fund.

"Launched in April 2002, the fund invests across global stock markets and fixed interest, property, hedge funds and structured products. The stock market element also includes reasonable exposure to medium and smaller companies, which is prudent. Borrows has delivered sector topping performance with low volatility, validation of the concept and his skill.

"Another attraction is the low charging structure; the manager buys direct shares and fixed interest where practical and only resorts to funds when more efficient do so. This results in low total annual costs of below 1.5 per cent, comparing favourably to most funds of funds, which typically cost in excess of 2 per cent.

Anna Bowes, Chase de Vere.

Novice Investor: Investec Cautious Managed.

"For the first time investor, dipping a toe into the stock market could be a good idea, rather than jumping straight in, however, it's important not to be discouraged by less impressive performance than that of pure equity funds during strong stock market returns.

"As the Fund Manager of the Investec Cautious Managed fund, Alastair Mundy can hold up to 60 per cent in equities and use investment grade corporate bonds and gilts to smooth out any peaks and troughs in performance, aiming for a slightly smoother return than you would expect to get with a pure equity fund - less volatility is less alarming for the novice investor.

"The bond portion of the fund is managed in line with the Investec core team driven process and overseen by John Stopford who is the Head of Fixed Income.

"The equity portion is well diversified, normally comprising 70-100 stocks. Of these, around 65-80 per cent are large companies and less then 10 per cent exposure to small companies.

The performance of the fund has been consistently good for many years, although it has been a very tough time for fixed interest for a couple of years now, over the past five years the fund has returned 45.36 per cent compared to the sector average of 29.77 per cent.

* Source: Offer to bid, total return to 29/01/2007 - Financial Express Analytics.

Experienced investor: Jupiter Emerging European Opportunities.

"Not a fund for the faint hearted. Eastern Europe isn't an area that tends to be held in it's own right in most portfolios, but the positive economic fundamentals in the area could provide an ideal investment opportunity for those willing to take a high level of risk to get growth.

"The fund manager, Elena Shaftan, has lived in Latvia and Russia and therefore has an in-depth knowledge of this specialist area and the co fund manager, Ingrid Kukuljan, is Croatian.

"It is a concentrated portfolio of around 30-35 stocks, which adds to the risk, but also the rewards if she makes the right decisions. Although taking a top down view, Elena's investment approach is very stock picking focused. She seeks businesses with a high visibility of earnings, strong fundamentals, strong and dedicated management, and the ability to maintain above average growth across the market cycles.

"The fund invests predominantly in Russia, with the balance in other Eastern European countries, such as Poland, Hungary, Turkey and the Czech Republic. In under-researched areas such as these, the fund manager's ability to extract information from company management is of great importance. Elena visits the region at least four times a year.

"The fund has returned over 333 per cent compared to the Global Emerging Markets sector average of 177 per cent since launch in September 2002*.

* Source: Offer to Bid, total return to 29/01/2007 - Financial Express Analytics.

Investor looking for Income: Invesco Perpetual Monthly Income Plus.

"If income is of primary importance, a fund that invests into fixed interest is likely to be pretty appropriate.

"But this fund is slightly different as it aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK Equities – up to 20 per cent of the portfolio can be in equities, managed by the vastly experienced Neil Woodford.

"This fixed interest portfolio has been managed by Paul Causer and Paul Read since launch in February 1999, although they have a far longer history of fund management in this area. This part of the fund invests into mainly government and other bonds and fixed interest securities in any part of the world.

"Since its launch, the Invesco Perpetual Monthly Income Plus fund is the second best performer in the sector, providing a total return of 78 per cent compared to the sector average of 43 per cent. Even over the last year, which has been extremely challenging for fixed interest investments, the fund was able to show a positive return of 3.66 per cent compared to the sector average of -14 per cent.

* Source: Offer to Bid, total return to 29/01/2007 - Financial Express Analytics.

Mark Dampier, Hargreaves Lansdown

"It is dangerous to believe that there is one investment for a novice and one for an experienced person. In reality the choice of investment depends far more on attitude to risk and age rather than experience.

Novice investor: Skandia UK Best Ideas Fund.

"Some might suggest this is for a more sophisticated investor, however I see no reason why as a novice investor I wouldn't want to get exposure to ten of the top UK fund managers in the industry.

"UK Best Ideas is effectively a multi manager fund whereby Skandia have gone to ten well-known fund managers; some of them include George Luckraft, Tony Nutt, Stephen Whittaker and Carl Stick. They are asked to pick their ten favourite stocks; diversification is achieved by using ten fund managers in all.

"For the novice investor, in one hit you get exposure to some of the very best talent available in the UK. In addition the money will be spread across large, medium and smaller companies so you will have widespread exposure to the UK market. The fund was launched in October and is already almost 10 per cent up and amongst the leading funds in its sector.

Experienced investor: Aberdeen Global Emerging Markets Fund

"This fund is run by Hugh Young and his team - one of the most experienced you will find in Asia and emerging markets generally. They have a very good long term track record and while the fund can sometimes under perform a really strong bull market, it tends to play catch up when markets move sideways.

"The fund invests in Asia, Eastern Europe, Latin America and the Middle East so one fund will give you exposure to many markets. Clearly this is a more volatile area and investors need to take a long-term approach to investing in some of the genuine growth opportunities of tomorrow.

Investors looking for income: Invesco Perpetual Income

"When looking for income many investors select a fixed interest fund. However I don't think the fixed interest markets look particularly good value but more importantly if you are a long-term investor, fixed interest offers you no long term growth in your income or capital.

"So I have selected Invesco Perpetual Income run by one of my favourite UK fund managers, Neil Woodford. The fund's objective is to grow the capital and income over the longer term. This makes an ideal investment for someone in retirement but as importantly can be used by virtually anyone else as the income can be reinvested thus increasing the return.

"It would be wrong to believe that income funds provide you very little capital growth, look at total returns. If you include reinvested income and the capital growth, the average equity income fund has beaten the average UK growth fund over most time periods. Neil Woodford's fund is heavily invested in utilities and tobaccos as he believes the UK economy is likely to face some tough going over the next few years.

"He has therefore selected stocks which are not economically sensitive and which should prosper whatever the economy should do. Last year the fund was a top performer, increasing by some 25 per cent. I see little reason why the fund shouldn't continue to do well."