Tom Stevenson’s Top Fund Picks for 2026 ISA Investments
What are the best funds to invest in for the coming year? Tom Stevenson from Fidelity shares his leading three fund selections for 2026, ideal for inclusion in your ISA or self-invested personal pension (Sipp).
During this installment of MoneyWeek Talks, he discusses with Kalpana Fitzpatrick the rationale behind his recommendations and offers guidance on determining the most suitable options for your personal investment strategy.
Tom Stevenson’s Leading Funds for 2026
Selecting fund recommendations after three consecutive robust years in the stock market presents a significant challenge, as Stevenson explained to MoneyWeek during the podcast discussion.
This difficulty is heightened by the risk of advising investments right at the market’s peak, just before a potential downturn. Consequently, it becomes essential to explore opportunities beyond the conventional investment arenas.
Stevenson elaborated: “The US stock market, which had been propelling global markets upward for several years, began to lag somewhat last year, allowing other regions to take the lead.
We observed impressive results from European equities, as well as from emerging markets and the UK market, which also performed strongly over the past year – this was the backdrop influencing my choices for fund recommendations this year.”
The investment patterns observed throughout 2025 are projected to persist into 2026, according to Stevenson. He foresees a growing number of investors seeking to broaden their portfolios beyond the US, a market that has delivered solid returns but has also become notably pricey.
Rather than sticking solely with the US, Stevenson expects capital to flow toward international markets offering superior value propositions – those that are more affordably priced yet retain promising growth potential.
Dodge and Cox Worldwide: Global Stock Fund
Stevenson’s initial recommendation leverages his outlook that investors will increasingly shift away from heavy US concentrations in their portfolios.
He selected the Dodge and Cox Worldwide Global Stock Fund because, in contrast to many global funds that allocate approximately 70% to US stocks, this fund maintains a more balanced exposure, with US holdings comprising only about 50% of the portfolio.
In his conversation with MoneyWeek, he noted: “Considering the ongoing shift away from US markets that I anticipate will extend into this year, this is a primary reason for my enthusiasm about this fund. Additionally, it deliberately avoids over-reliance on the stock categories that have excelled recently, particularly technology and AI-related companies that have inflated US valuations to extreme levels.
Instead, the fund targets diverse sectors and includes a broad spectrum of companies from various global locations, spanning Taiwan, the UK, Europe, and select US firms. This makes it my top choice.”
Fidelity Special Situations
For his second recommendation, Stevenson highlights Fidelity’s Special Situations fund, which primarily invests in UK equities.
The rationale for favoring a UK-focused fund lies in the current undervaluation of the UK market, which stands in stark contrast to the US landscape.
Stevenson pointed out that while the US is dominated by technology sectors, the UK offers exposure to more traditional industries such as pharmaceuticals, banking, and mining – areas often described as ‘old economy’ sectors that have recently begun to demonstrate strong performance.
“The key appeal of the UK market, from my perspective, is its exceptionally low valuation relative to the US. As investors rotate out of pricier US assets in search of alternatives, markets like the UK, which remain remarkably inexpensive, become highly attractive. The Fidelity Special Situations Fund provides an excellent vehicle for gaining access to this opportunity.”
Lazard Emerging Markets Fund
Despite emerging markets trailing behind the US in recent performance, Stevenson is optimistic about their potential resurgence in 2026.
“History shows us extended cycles where either the US leads or the broader global markets take precedence. We’ve endured a prolonged stretch of US dominance, but I believe we’re now entering a phase of rotation, positioning emerging markets favorably.”
Beyond cyclical trends, Stevenson identifies compelling structural advantages for emerging markets. These include consistently higher economic growth rates and demographics characterized by youthful, expanding populations.
Moreover, emerging markets often shine brightest during periods when the US dollar weakens. With US interest rates trending downward, Stevenson anticipates continued dollar depreciation, creating “an ideal environment for emerging market investments.”
To take advantage of this trend, he endorses the Lazard Emerging Markets Fund, praising its proven expertise and successful history in navigating these dynamic markets.
Stevenson’s selections reflect a strategic emphasis on diversification, value, and growth opportunities outside the overvalued US market, helping investors position their portfolios effectively for the year ahead amid shifting global dynamics.
