Top 10 most popular funds - September 2019
Investors in September did not seem particularly bearish, judging by their fund choices.
4th October 2019 14:46
by Tom Bailey from interactive investor
Investors in September did not seem particularly bearish, judging by their fund choices.
Last month, we took the appearance of Investec Global Gold and Vanguard LifeStrategy 20% Equity in our league table of the 10 most popular funds as evidence of investors turning more bearish.
In our latest league table (based on data for the month of September from Money Observer’s parent company interactive investor), the gold fund has gone, but Vanguard LifeStrategy 20% has stayed, edging up two places.
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Vanguard LifeStrategy 20%, with its high exposure to fixed income, can be seen as a relatively cautious bet that is better able to hold up in a market downturn.
Over one year, the passive fund has substantially outperformed its more equity-exposed equivalents, returning 9% between 1 October 2018 and 1 October 2019. That was largely driven by the fall in bond yields (and appreciation in prices), following the move towards more dovish monetary policy by global central banks including the US Federal Reserve and the European Central Bank.
Over the longer term, however, being so underweight equities has been a drag on its performance, with its three-year return standing at just 12.5%.
But, overall, investors in September do not seem particularly bearish, judging by their fund choices. The top 10 funds still suggest an optimistic outlook.
For example, Fundsmith Global Equity is still number one on the list. The fund has a high exposure to US tech companies, such as PayPal, Microsoft and Facebook – the sort of companies that more cautious investors would perhaps avoid so many years into the bull market.
Over the past year, the fund has rewarded investors with a return of over 11%. Over three years, it has returned 55.1%.
At the same time, Vanguard trackers with high US and global equity exposure, including Vanguard LifeStrategy 80% Equity and Vanguard US Equity Index, kept their place high up the rankings. Again, these are not the sort of choices you’d expect from investors worrying about an impending market downturn.
Falling slightly was AXA Framlington Global Technology. The technology-focused fund has benefited from the continued outperformance of US tech in recent years, giving investors a three-year return of 78% – the highest over three years among the top 10 most popular funds in September.Â
Nick Train’s two funds, Lindsell Train Global Equity and Lindsell Train UK Equity, kept their place in the top 10. Both have been able to provide investors with a one-year return of more than 12% over the past year.
Re-entering the rankings was Vanguard FTSE Developed World ex UK Index. This could be read as a sign of investor pessimism around Brexit, with investors wishing for global market exposure without being exposed to the UK.
| Rank | Fund | IA Sector | Change since August | 1-year return (to October 4) | 3-year return |
|---|---|---|---|---|---|
| 1 | Fundsmith Equity | Global | no change | 11.60% | 55.10% |
| 2 | Lindsell Train Global Equity | Global | no change | 12.60% | 66.70% |
| 3 | Vanguard LifeStrategy 80% Equity | Mixed Investment 40%-85% Shares | no change | 4.40% | 25.40% |
| 4 | Lindsell Train UK Equity | UK all companies | no change | 12.70% | 40.60% |
| 5 | Vanguard LifeStrategy 60% Equity | Mixed Investment 40%-85% Shares | no change | 6.10% | 20.90% |
| 6 | Vanguard US Equity Index | North America | no change | 4.90% | 44.10% |
| 7 | Vanguard LifeStrategy 100% Equity | Global | 2 | 2.80% | 29.90% |
| 8 | Vanguard LifeStrategy 20% Equity | Mixed investment 0%-35% Shares | 2 | 9.60% | 12.50% |
| 9 | Vanguard FTSE Developed World ex UK Index | Global | new entry | 4.50% | 37.40% |
| 10 | AXA Framlington Global Technology | Global | -2 | 9% | 78% |
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.