Small-caps, natural resources and higher-risk global equities are all areas that investors may wish to turn to if they are bullish on the medium-term outlook for markets.
There are few reasons for optimism at present, with markets worrying about the level of US debt. Even strong results from Nvidia – the posterchild for the AI boom – failed to lift markets initially on Thursday morning.
Yet a 'boom' scenario is seen as the second-most likely outcome from here, according to professionals surveyed by Bank of America earlier this month. Some 43% expected a combination of above-trend growth and inflation, the highest reading for this outcome since February 2022.
Having previously looked at fund ideas for the most popular outcome – stagflation – here Trustnet asked expert fund pickers for their best 'boom' options.
Scottish Mortgage
In a world where inflation and growth are both above their long-term historical averages, Matt Ennion, head of fund research at Quilter Cheviot, said Baillie Gifford's Scottish Mortgage trust makes a lot of sense for investors.
The trust invests in a combination of global private and public companies, with a bias towards businesses at the forefront of technological change that are expected to grow into pioneering companies capable of compounding returns over time, said Ennion.
"As a result, we feel like this differentiates the strategy from a number of other growth funds/trusts in the market," he said.
Managed by FE fundinfo Alpha Manager Tom Slater and deputy Lawrence Burns, the trust has been the best performer in the IT Global sector over the past decade and dominates over shorter timeframes too.
"The trust's core strengths are the experienced and capable portfolio management team, unique access to some high-quality private businesses in a listed vehicle, an extensive and impressive track record and their proactive and robust investment process, meaning it has a good history of picking winners over the long-term," said Ennion.
Performance of trust vs sector and benchmark over 10yrs
Source: FE Analytics
However, there have been moments where the strategy has struggled, such as the rapid interest rate hike environment of 2022, when the trust nearly halved in size, down 45.7%.
"Scottish Mortgage should primarily act as a source of alpha generation within the portfolio, however, due to its high volatility, it should be balanced with less volatile investments, even in a high growth market environment," said Ennion.
Redwheel Global Intrinsic Value
Taking the opposite strategy, Rob Morgan, chief investment analyst at Charles Stanley, chose a strategy that looks for undervalued companies.
"When economic growth and inflation is strong, corporate earnings tend to increase and, in particular, benefit value stocks whose earnings progression can surprise investors relative to long-duration growth stocks," he said.
"A global value fund should capture this well, as well as provide genuine diversification to the usual suspects found in global trackers and growth funds."
Redwheel Global Intrinsic Value is managed by Ian Lance and Nick Purves, who are also behind the Temple Bar investment trust.
Launched in 2023, the fund has made a strong start to life, up 81% since inception. This places it firmly in the top quartile of the IA Global sector during this time.
Performance of trust vs sector and benchmark since launch
Source: FE Analytics
"In a world where value can mean different things to different people, this is a traditional stock picking fund focused on finding truly cheap businesses across the globe that sticks to a tried and tested philosophy and process," said Morgan.
Aberforth Smaller Companies Trust
For Sheridan Admans, founder of Infundly, another way to play the boom scenario is to turn up the risk dial by investing in smaller companies, with domestic UK minnows his preferred option.
"If stronger growth accompanies persistent inflation, UK smaller companies could offer particularly attractive upside. They tend to be more sensitive to changes in economic activity than larger, internationally diversified businesses, so improving demand and corporate confidence should feed more directly into earnings," he said.
"A stronger economy could help close that gap through earnings recovery, improved investor sentiment and further takeover activity."
Aberforth Smaller Companies Trust has an excellent track record in the IT UK Smaller Companies sector, sitting in the top quartile of the peer group over one, three, five and 10 years.
It uses a "distinctly contrarian" way of investing, with the managers focusing on fundamentally sound businesses trading below their assessment of intrinsic value.
It is headed by Euan Macdonald, who has managed the trust since 2001, although there are six named managers on the fund, including former Ruffer portfolio manager Duncan MacInnes, who was the most recent addition in 2025.
"The trust's gearing could enhance returns in a rising market, although it also increases risk. Persistent cost pressures or interest rates remaining higher for longer would be the main threats to the case," said Admans.
CQS Natural Resources Growth and Income
Turning towards more alternative strategies, Quoted Data senior analyst Matthew Read noted that higher economic growth tends to lift demand for commodities, while persistent inflation should also support the prices of the commodities, making them "natural inflation hedges".
"This is particularly true of precious metals such as gold, which CQS Natural Resources Growth and Income has a high exposure to, but also applies to the energy and other resources companies that the trust holds," he said.
"Given the long period of underinvestment in new supply across many commodity markets, stronger demand could translate disproportionately into higher prices and cashflows."
Mines and other assets tend to require huge initial investment to set up but, once they are up and running, the cost base is fixed, noted Read, meaning higher prices quickly turn to additional profits.
Additionally, valuations across much of the resources sector are "still relatively undemanding" and CQS Natural Resources Growth and Income offers investors "a compelling way of playing a potential reflationary boom".