Top 10 most popular investment funds: April 2020

There are four new entries in our top 10 list amid an investor rush towards one sector.

The most-bought funds table has been redrawn following the shock the coronavirus pandemic has inflicted on the global economy, with four new entries and some mid-table shifting.

In tech we trust, it seems, with many investors piling into technology-focused funds amid further recognition of our reliance on the tech giants and their ability to help carry us through this unprecedented crisis. Many tech firms are, of course, likely to emerge stronger as a result, with Amazon, for example, experiencing a sales surge under lockdown, while thousands of new users flock to Netflix to keep themselves entertained.

The most-bought funds list, which is compiled from data supplied by our parent company interactive investor, reveals that the ratio of active and passive funds is now balanced, with the top 10 table containing five passive funds. While passive funds are low-cost options, the experienced hand of a professional fund manager is perhaps proving tempting to many investors unnerved by the current situation. While investors who buy passive funds accept index performance, minus fees, those who choose the active route are hoping for the fund manager to outperform the index, in good times and bad. 

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Baillie Gifford American, which has burst on to the scene in fifth place, offers investors exposure to sectors including consumer cyclical, technology, healthcare, and communications services. It has within its top 10 holdings the likes of Amazon, Tesla, Netflix and Alphabet. The fund is one of a small number of funds that managed to produce a positive return in the first three months of this year, up 1.5%. 

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Polar Capital Global Technology, which has joined the list in ninth place, is another fund heavily exposed to the US tech giants, with Microsoft, Apple, and Amazon in the portfolio. Other tech funds that are new entrants in our list include the L&G Global Technology Index, with top 10 holdings including Taiwan Semiconductor Manufacturing, Facebook, and Intel, and Baillie Gifford Global Discovery, which offers exposure to healthcare and tech, in 10th place.

Lindsell Train Global Equity has moved up the table into third place. The managers’ focus is on ‘boring’ companies they believe have sustainable business models. In such uncertain times, boring has huge appeal among investors, The fund holds a number of consumer-defensive stocks, such as Unilever. 

Perennially popular low-cost passive fundsVanguard LifeStrategy 80% Equityand Vanguard LifeStrategy 60% Equity maintain their second and fourth spots, respectively, in our table, but Vanguard LifeStrategy 100% has slumped to sixth place andVanguard US Equityhas fallen three places to the eighth spot.

Finally, nothing, it seems, can knock Fundsmith Equity from its position at the top of the table. The fund held up well during the first quarter and manager Terry Smith in a recent note to shareholders explained how he felt vindicated about his scepticism over value stocks.