Interactive Investor

Top 10 most-bought investment funds: December 2023

The star fund slips down to fourth amid a challenging environment for investors.

2nd January 2024 13:58

Nina Kelly from interactive investor

In December 2022, Fundsmith Equity was the most-bought fund on the platform, based on the number of “buys” among our customers during the month. But what a difference a year makes.

A year later Terry Smith’s £22.7 billion global equities fund was in fourth place in our top 10 rankings for December, down from second place the month prior. While it was the most-bought fund on the platform for the whole year, is the allure of this quality-growth fund starting to wane?

Royal London Short Term Money Market was still the most-bought fund owing to investor caution amid rising interest rates, which have pushed the yield to 5.26%, according to the firm’s November factsheet.

Investors are gravitating towards this low-risk, diversified fund because it offers them a way of earning income on their cash while they wait for the right investment opportunity as commentators discuss the threat of recession. Managers of money market funds invest in cash-based financial products including fixed deposits and government bonds. Money market funds can be held in a self-invested personal pension (SIPP), a stocks and shares ISA, or a general investment account.

The only other actively managed fund in December’s top 10 was Jupiter India (fifth place). For anyone keen to invest, specialist writer Ceri Jones recently considered whether there’s still time to buy into funds concentrating on the best-performing index post-Covid.

The top 10 table for December demonstrates that fund investors, in the main, are seeking low-cost, global passive strategies, such as HSBC FTSE All-World Index (sixth place). There were no new entrants in December, and only a little shuffling.

Tracker fund L&G Global Technology Index moved up one place to second. This specialist was the second-best performing fund of 2023 (in total return terms). Tech’s success is owing to excitement over artificial intelligence (AI) and demand for computer-chip companies such as NVIDIA Corp (NASDAQ:NVDA). The L&G fund costs 0.32% to own, and its top 10 holdings include Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL), and Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM).

Vanguard LifeStrategy 80% Equity was the second-most bought fund on the platform in 2023, and the third-most bought of December. This is a low-cost diversified fund that’s perennially popular among investors is one of our six Quick-start Funds, which are designed to offer a simple route into investing.

Four other funds from Vanguard’s stable filled the lower part of the table, with Vanguard Life Strategy 100% Equity in seventh place, followed by Vanguard US Equity Index (eighth place), Vanguard FTSE Dev World ex-UK Equity Index (ninth),  and  Vanguard FTSE Global All Cap Index (10th).

Top 10 most-popular investment funds in December 2023 

Rank  FundIA sectorRanking change since previous month1-year return to 2 Jan (%)3-year return to 2 Jan (%)
1Royal London Short Term Money Mkt Short Term Money MarketNo change4.80%6.22%
2L&G Global Technology IndexTechnology and Technology InnovationsUp one53.27%49.41%
3Vanguard LifeStrategy 80% EquityMixed investment 40%-85% sharesUp one11.83%16.71%
4Fundsmith EquityGlobalDown two12.48%18.63%
5Jupiter IndiaIndia/Indian SubcontinentNo change31.186.4
6HSBC FTSE All-World IndexGlobalNo change15.41%27.78%
7Vanguard LifeStrategy 100% EquityGlobalNo change13.47%26.75%
8Vanguard US Equity IndexNorth AmericaNo change18.61%35.50%
9Vanguard FTSE Dev World ex-UK Equity IndexGlobalNo change17.22%31.45%
10Vanguard FTSE Global All Cap IndexGlobalNo change14.72%25.51%

Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of December.

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.