Interactive Investor

Top 10 most popular investment funds: August 2020

1st September 2020 15:02

Nina Kelly from interactive investor

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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. 

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.

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.

The two funds that have exited the top 10 are Baillie Gifford China and Polar Capital Global Technology

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.

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.

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