Two new names enter our monthly ranking as investors remain committed to tech and healthcare.
Baillie Gifford funds continue to act as a magnet for investors and comprise half the top 10 table, while Baillie Gifford American retains its second-place foothold for a fourth consecutive month, according to data from interactive investor’s platform.
The aim of Baillie Gifford American is to find “exceptional growth companies in North America, invest in them at scale in a concentrated portfolio, and hold on to them for a very long time”, according to portfolio manager Dave Bujnowski. The fund’s “exceptional” finds include Canadian tech champion Shopify, Tesla, Amazon, e-commerce firm Wayfair, and Netflix. Baillie Gifford American has a 23-year track record of outperforming the S&P 500 index and over the past year it has performed very well, something that Bujnowski told interactive investor’s head of editorial Lee Wild that he attributes, in part, to the acceleration in lockdown of existing technology trends.
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Meanwhile, Baillie Gifford Positive Change keeps its third-place position. As its name suggests, the fund aims to invest to “deliver positive change by contributing towards a more sustainable and inclusive world”. The Baillie Gifford website even has a calculator revealing your own positive impact on the planet last year, according to the size of your investment in the fund. For example, if you invested £1,000, you have saved 591 litres of drinking water, for example, among other things.
Baillie Gifford Global Discovery and Baillie Gifford Long-Term Global Growth have both slipped one place since last month to fifth and sixth, respectively. While the former fund concentrates on the global small-cap equity space and its top holding is currently Alnylam Pharmaceuticals, the latter fund’s focus is on large-cap global firms and Tencent, Alibaba and Illumina are among its top five investments.
The fifth and final Baillie Gifford fund in the top 10 is Baillie Gifford Managed, which remains static in eighth place. The fund, which is overseen by Tom Slater, who also co-manages Scottish Mortgage investment trust, invests at least 90% in equities of global large-cap growth businesses.
But what about those new entrants? The first fund is Rathbone Global Opportunities, which has entered the list in ninth place. Among its top five holdings are Amazon, computer software firm Adobe, and PayPal. Ayesha Akbar, multi-asset fund manager at Fidelity, recently identified the fund as investing in some “under the radar” companies with the potential to grow. Manager James Thomson also allocates anywhere between 15% and 25% to recession-resistant businesses, those companies that are not as closely linked to the economic cycle, or where demand is more predictable.
The other newcomer is L&G Global Technology Index, which is in 10th place. This fund’s performance has been strong and it made the top 10 list of best-performing funds of 2019. The low-cost passive fund (with an ongoing charges figure of 0.32%), which tracks the performance of the FTSE World-Technology Index, has continued to perform well this year and is up 33% year to date.
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L&G’s presence in the top 10 takes the passive funds tally up to three alongside Vanguard LifeStrategy 80% Equity and Vanguard LifeStrategy 60% Equity in fourth and seventh place, respectively. However, while the low-cost multi-asset Vanguard LifeStrategy range is popular among investors, BlackRock MyMap and BMO Universal Multi-Asset Portfolios are challenging the leviathan’s dominance with their own range of funds – BlackRock even has an ESG (environmental, social and governance) option. Will ethically minded investors, as well as those with an eye on the resilience of ESG investments during the pandemic, be tempted to jump ship?
Last but not least is Fundsmith Equity: the most-bought fund among customers of interactive investor. Run by “star” manager Terry Smith, who has been at the helm since launch in 2010, the global growth fund’s top five holdings are Microsoft, Danish healthcare firm Novo Nordisk, tobacco company Philip Morris, PayPal, and Estee Lauder, the US skincare, fragrance and beauty group.
Top 10 most popular funds: August 2020
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 1 Sept||3-year return to 1 Sept|
|1||Fundsmith Equity||Global||No change||11.31%||52.60%|
|2||Baillie Gifford American||North America||No change||79.95%||176.47%|
|3||Baillie Gifford Positive Change||Global||No change||75.34%||120.94%|
|4||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||+2||3.66%||17.05%|
|5||Baillie Gifford Global Discovery||Global||-1||43.59%||103.58%|
|6||Baillie Gifford Long-Term Global Growth||Global||-1||88.49%||138.63%|
|7||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||-1||3.48%||16.10%|
|8||Baillie Gifford Managed||Mixed investment 40%-85% shares||No change||24.45%||43.49%|
|9||Rathbone Global Opportunities||Global||New entry||24.06%||60.05%|
|10||L&G Global Technology Index||Technology and Telecommunications||New entry||47.80%||102.59%|
Source: Interactive investor. Note: The top 10 is based on the number of “buys” during the month of August.
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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.