10 most popular funds in January 2019

by Kyle Caldwell from interactive investor |

One fund sector dominates the month's most-bought table. Find out which funds everyone's buying here.
 

There's little movement in our top 10 most popular funds league table, with global equities remaining the most popular choice among investors of our parent company interactive investor. 

In total, six funds in the table adopt a global approach, up from four a year ago.

This is another sign that investors are becoming increasingly cautious, following a pick-up in volatility in the final three months of 2018. 

As ever, Fundsmith Equity tops the table – a position it has occupied virtually every month since our sister website Money Observer started keeping tables on the most popular funds around five years ago. 

Managed by no-nonsense investor Terry Smith, the fund has rewarded its strong following, returning 288% since launch in November 2010. Smith's approach is to pick a small selection of high-quality, resilient global growth companies that are good value, and stick with them. Just a handful of holdings have been changed since the fund's inception. 

In second place is Lindsell Train Global Equity, which adopts a similar style to Fundsmith Equity, in seeking out high-quality businesses that should in theory stand the test of time. Managers Nick Train and Michael Lindsell focus on "boring" companies that they believe have truly sustainable business models.  

The four other funds in our top 10 that adopt a global approach are tracker funds, which follow the fortunes of stock-market indices: Vanguard LifeStrategy 100% Equity, Vanguard LifeStrategy 80% Equity, Vanguard LifeStrategy 60% Equity and Vanguard FTSE Developed World (LSE:VEVE)

Vanguard's LifeStrategy fund range invests in various indices, with the equity weighting ranging from 20% to 100% and the balance held in bonds and cash. The funds are popular, particularly with do-it-yourself investors, with each of the five funds in the suite displaying an ongoing charge figure of 0.22% (though of course this does not include the fund's trading costs).

Elsewhere, two UK funds have kept their places in the top 10: LF Lindsell Train UK Equity and CFP SDL UK Buffettology. On the whole, though, UK equities are deeply out of favour. According to the Investment Assocation more than £10 billion of domestic retail investors' money has exited from UK equity funds since June 2016, with a large chunk having been redeployed into overseas businesses.

International investors have also been steering clear of the UK, despite the weak pound.Completing the top 10 are Vanguard US Equity Index and Baillie Gifford American. After a disappointing 2018, US shares bounced back strongly in January, with the S&P 500 index Dow Jones index posting their best January performances since 1987 and 1989, respectively. 

 

Rank Fund IA sector Change since December *1 year (%) *3 years (%)
1 Fundsmith Equity Global -- 6 65.5
2 Lindsell Train Global Equity Global -- 14.1 77.2
3 Vanguard LifeStrategy 80% Equity Mixed Investment 40%-85% Shares -- 0.5 39
4 LF Lindsell Train UK Equity UK all companies 5 4.3 38.8
5 Vanguard LifeStrategy 60% Equity Mixed Investment 40%-85% Shares -1 0.9 30.7
6 CFP SDL UK Buffettology UK all companies 1 5.8 54.8
7 Vanguard LifeStrategy 100% Equity Flexible -2 -0.1 47.6
9 Vanguard US Equity Index North America New entry 6 61.8
9 Vanguard FTSE Developed World Global 1 1.6 53.6
10 Baillie Gifford American North America -4 17.9 109.6

Data up to 1 February 2019. Source: Morningstar.

This article was originally published in our sister magazine Money Observer. Click here to subscribe.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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