10 most-popular investment funds – January 2020
Technology funds had a fantastic run in 2019 and this has piqued investor interest.
7th February 2020 10:07
by Kyle Caldwell from interactive investor
Technology funds had a fantastic run in 2019 and this has piqued investor interest, propelling three tech-focused funds into our list of the top 10 most-popular funds.
As sure as night follows day, a hot fund sector will catch the eye of retail investors, which is why at the start of 2020 technology funds are all the rage.
Three tech funds have entered our top 10 most-bought funds table, which is based on the buying behaviour of interactive investor’s customers. The broker is the parent company of Money Observer.
Despite a number of tech-related IPO flops from firms such as Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) and WeWork (which did not even get to IPO stage), 2019 will go down in the history books as another stellar year for tech businesses, with the expensively priced FAANG stocks continuing to make hay. By extension tech funds had a strong year, with the average fund in the Investment Association technology sector up around 30%.
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At the start of 2020 investors moved to increase exposure, with L&G Global Technology Index, Fidelity Global Technology and AXA Framlington Global Technology all entering the top 10. As the table below shows, on a one-year view (to 3 February) fund returns have ranged from 28.4% to 39.9%.
An extension of the tech theme is being played out through Baillie Gifford American, another new entry into the top 10 table. Amazon (NASDAQ:AMZN) is its top holding (with a weighting of 8.2%), while Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) are all top 10 positions in the portfolio.
At the top of the leaderboard, though, there’s no change, with Fundsmith Equity continuing to hold comfortably onto top spot. In Fundsmith Equity fund’s annual letter to investors, fund manager Terry Smith vowed not to make the same “style drift” mistake that proved to be one of the big factors behind Neil Woodford’s spectacular rise and fall from grace. His recent comments followed on from his vow last September never to invested in unlisted businesses.
Second spot also remained unchanged, with Vanguard LifeStrategy 80% Equity retaining its position. It is joined in third and fourth place by two other funds in the same fund range: Vanguard LifeStrategy 60% and Vanguard LifeStrategy 100% Equity. The LifeStrategy funds are global multi-asset passive funds that invest in various indices, with equity weightings of fixed proportions ranging from 20% to 100% and the balance held in bonds and cash. The Vanguard fund fee is low, at 0.22%.
Also retaining their places in the top 10 are Lindsell Train Global Equity and Vanguard US Equity Index. The Lindsell Train fund, managed by the asset management firm’s eponymous founders Michael Lindsell and Nick Train, has slipped three places in the rankings. While the Vanguard tracker fund has jumped up one place.
Departing the top 10 are three funds that were new entries in December: HSBC FTSE 250 Index, Franklin UK Mid Cap and TB Amati UK Smaller Companies. Their foray into the top 10 came in the same month that investor confidence towards UK equities vastly improved, as the risk of a socialist government led by Jeremy Corbyn coming into power was removed.
Also exiting the top 10 is Lindsell Train UK Equity, which has regularly featured as one of the most popular funds each month with clients of interactive investor. At the end of December analyst Morningstar downgraded the fund, citing concerns around liquidity. However, it has retained the backing of interactive investor, remaining on its Super 60 list.
| Rank | Fund | IA Sector | Change since November | 1-year return (to Feb 3) | 3-year return |
|---|---|---|---|---|---|
| 1 | Fundsmith Equity | Global | no change | 23.3 | 59.8 |
| 2 | Vanguard LifeStrategy 80% Equity | Mixed Investment 40%-85% Shares | no change | 14.9 | 26.1 |
| 3 | Vanguard LifeStrategy 60% Equity | Mixed Investment 40%-85% Shares | 1 | 13.3 | 22.5 |
| 4 | Vanguard LifeStrategy 100% Equity | Global | 1 | 16.6 | 29.7 |
| 5 | L&G Global Technology Index | new entry | 39.9 | 81.7 | |
| 6 | Fidelity Global Technology | new entry | 32 | 76.2 | |
| 7 | Lindsell Train Global Equity | Global | -3 | 14.2 | 65.3 |
| 8 | Vanguard US Equity Index | North America | 1 | 22.3 | 41.8 |
| 9 | AXA Framlington Global Technology | new entry | 28.4 | 85.9 | |
| 10 | Baillie Gifford American | North America | new entry | 26 | 82.9 |
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.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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.
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.