There was a resurgence in the popularity of technology funds in January, as Lindsell Train UK Equity slipped off the list of top 10 fund purchases on interactive investor, the UK’s second largest direct to consumer investment platform.
Having failed to register on the top 10 bestsellers list in December, technology funds accounted for three of the top positions in January.
LF Lindsell Train UK Equity was the seventh bestselling fund in November, tenth in December, but failed to make the cut in January for the first time since September 2018 – falling to 19th place. The fund was downgraded by two independent external agencies towards the end of 2019. interactive investor chose to keep the fund on its Super 60 rated list following a formal review conducted on 29 November 2019 and completed on 19 January 2020.
Vanguard once again dominates the bestsellers list, scooping four of the top 10 spots.
Three of these come from Vanguard’s popular LifeStrategy range, with the 80% Equity variant in second, ahead the 60% and 100% equity options in third and fourth positions respectively.
Technology also proved to be a popular theme on the investment trust front. Of the two tech centric investment trusts on the list, Polar Capital Technology (LSE:PCT) ranks highest in fourth position – four places ahead of Allianz Technology Trust (LSE:ATT) in eighth.
Scottish Mortgage (LSE:SMT) remains rooted at the top of the table – boasting a record as the most purchased investment trust on the interactive investor platform month in, month out since February 2014, except once.
UK Smaller Companies were easily the theme of December, but BlackRock Throgmorton Trust (LSE:THRG) was the sole trust investing predominately in the sector to make the top 10 list in January.
Teodor Dilov, Fund Analyst, interactive investor, says: “Considering the fact that large cap technology names in the US and the tech industry in general have been the growth engine over the recent years, it no surprise that customers investing for growth still seek to gain exposure to this theme.
“However, it should be noted that current valuations in this sector are at historical highs. Taking into account that the economic cycle is maturing and growth stocks have been dominating their value peers for the past decade, investors should take extra care when reviewing their exposure. In addition, tech specific vehicles should be regarded as a satellite holding within a well-diversified portfolio as this is a very specialist area which involves a higher degree of risk.”
Dzmitry Lipski, Head of Funds Research, interactive investor, says: “The derating of Lindsell UK Equity Fund by two external agencies over liquidity fears may have raised questions for some investors. But having done extensive analysis on the liquidity, capacity and concentration of Lindsell Train UK Equity, we are comfortable with the liquidity of the fund, since the majority of the holdings are large, liquid companies with diversified revenue streams.
“In terms of capacity, there is plenty of room for further growth without compromising the mandate. The fund has always had a concentrated, high conviction approach but has a low turnover and long-term successful track record.”
Most bought funds, investment trusts and shares in January 2020
|Fundsmith Equity||Scottish Mortgage|
|Vanguard LifeStrategy 80% Equity||City of London|
|Vanguard LifeStrategy 60% Equity||The Renewables Infrastructure Group|
|Vanguard LifeStrategy 100% Equity||Polar Capital Technology Trust|
|L&G Global Technology Index Trust||BlackRock Throgmorton|
|Fidelity Global Technology||Finsbury Growth & Income|
|Lindsell Train Global Equity||JP Morgan Emerging Markets|
|Vanguard US Equity Index||Allianz Technology|
|AXA Framlington Global Technology||Smithson|
|Baillie Gifford American||Henderson Far East Income|
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