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
by Nina Kelly from interactive investor
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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.
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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?
- Terry Smith adds tech stock owned by Smithson to flagship portfolio
- Investor caution boosts demand for money market funds
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.
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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 Strategy100% 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 | Fund | IA sector | Ranking change since previous month | 1-year return to 2 Jan (%) | 3-year return to 2 Jan (%) |
| 1 | Royal London Short Term Money Mkt | Short Term Money Market | No change | 4.80% | 6.22% |
| 2 | L&G Global Technology Index | Technology and Technology Innovations | Up one | 53.27% | 49.41% |
| 3 | Vanguard LifeStrategy 80% Equity | Mixed investment 40%-85% shares | Up one | 11.83% | 16.71% |
| 4 | Fundsmith Equity | Global | Down two | 12.48% | 18.63% |
| 5 | Jupiter India | India/Indian Subcontinent | No change | 31.1 | 86.4 |
| 6 | HSBC FTSE All-World Index | Global | No change | 15.41% | 27.78% |
| 7 | Vanguard LifeStrategy 100% Equity | Global | No change | 13.47% | 26.75% |
| 8 | Vanguard US Equity Index | North America | No change | 18.61% | 35.50% |
| 9 | Vanguard FTSE Dev World ex-UK Equity Index | Global | No change | 17.22% | 31.45% |
| 10 | Vanguard FTSE Global All Cap Index | Global | No change | 14.72% | 25.51% |
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of December.
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