Interactive Investor

Top 10 most-popular investment funds: April 2022

3rd May 2022 13:08

Nina Kelly from interactive investor

Three new entries, why investors are flocking to passive right now, and an old favourite returns.

Passive funds and Vanguard’s offering dominate the top 10 list, according to data on the most-bought funds on the interactive investor platform.

Fund leviathan Vanguard boasts six entries in the top 10 table, including multi-asset funds Vanguard LifeStrategy 80% Equity (static in second place), while the 100% Equity and 60% Equity options also retained their positions on last month in third and fourth place respectively. The 60% and 80% options are part of ii’s Quick-start funds range aimed at beginners.

Our deputy collectives editor Sam Benstead recently wrote a popular article explaining how to build your own ‘LifeStrategy’ fund and cut costs. The piece explores replicating the 100% Equity option and is aimed at those investors who are comfortable building their own passive portfolios.

Other passive funds in the table include the Vanguard FTSE Global All Cap Index, which held on to sixth place, while L&G Global Technology Index was seventh. Another recent ii article focuses on the surging popularity of index funds at a time when markets are actually falling. One reason is investors’ seeking safety in diversification.

Cost is another reason investors plump for passive funds, and amid a cost of living crisis with soaring food and energy bills and inflation at a 30-year high, investors may prefer the low fees of trackers to forking out for a professional stock picker. In some areas of the market, it is more challenging for active managers to beat their benchmark, including in the US. This could account for the presence of ii Super 60 fund Vanguard US Equity Index in our table (fifth place). This low-cost tracker, which has a yearly fee of 0.10%, is a new fund in ii’s Low-Cost Growth Model Portfolio.

Two of the new entries in the April top 10 table are passive funds, namely Fidelity Index World and Vanguard FTSE Developed World ex-UK Equity Index. The former fund’s yearly fee is 0.12%, while the latter’s is 0.14%. Fidelity’s global large-cap equities fund offers exposure to 1,544 stocks and its top 10 holdings include tech giants Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).

The index the Vanguard fund tracks is comprised of large and mid-size shares providing coverage of developed markets, excluding the UK, and it offers exposure to 2,126 stocks. As you would expect from the name, the Vanguard FTSE Developed World ex-UK Equity Index fund’s largest geographical exposure is to the US (69.7%), followed by Japan (7.1%), and technology is the largest sector weighting (23.9%).

Investors in ii Super 60 Fundsmith Equity remain steadfastly loyal to Terry Smith’s quality growth philosophy and his flagship fund remains at the top of our table, despite suffering short-term performance issues, some of which is attributable to its growth investment style being out of favour.

Smith recently explained his decision to continue to back Facebook (Meta (NASDAQ:FB) and its vision of a virtual reality world known as the metaverse despite other tech investors, including Polar Capital Technology’s Ben Rogoff and Blue Whale Growth’s Stephen Yiu, respectively reducing/selling their positions in Mark Zuckerberg’s brainchild.

Despite its high-quality growth investment style being out of favour at present, Baillie Gifford Positive Change bounced back into the top 10 table in ninth place. The £2.5 billion five-year old fund is a member of ii’s ACE 40 list of recommended ethical funds, and co-manager Kate Fox recently shared with us why it continues to own two struggling stocks.

Our top 10 table for April will also no doubt reflect the fact that ii customers will have been topping up their ISAs and self-invested personal pensions (SIPPs) before the end of the tax year on 5 April.

Three funds exited the top 10 table in April are: Baillie Gifford American, JPMorgan Natural Resources, and the Vanguard FTSE UK Equity Income Index.

Top 10 most-popular investment funds: April 2022

Rank   Fund IA sector Ranking change since previous month 1-year return to 3 May (%) 3-year return to 3 May (%)
1 Fundsmith Equity Global No change 1.1 38.1
2 Vanguard LifeStrategy 80% Equity Mixed investment 40%-85% shares No change 2.1 24.1
3 Vanguard LifeStrategy 100% Equity Global No change 5 31
4 Vanguard LifeStrategy 60% Equity Mixed investment 40%-85% shares No change minus 0 17.1
5 Vanguard US Equity Index North America Up two 6.1 49
6 Vanguard FTSE Global All Cap Index Global No change 4 35.1
7 L&G Global Technology Index Technology & Telecommunications Down two 5.1 86.1
8 Vanguard FTSE Developed World ex-UK Equity Index Global New entry 6 42
9 Baillie Gifford Positive Change Global New entry minus 14.1 88
10 Fidelity Index World P Acc Global New entry 9 43.1

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

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