Baillie Gifford fund goes where no ethical fund has gone before, and one newcomer joins the top 10.
While many Britons travelled to Cornwall or Cumbria for a much-needed holiday in August, interactive investor customers stuck to familiar ground with their fund choices, according to our monthly ranking of the most-bought funds based on the number of buys.
Only one new fund entered the top 10 most-bought funds’ list, and while there was some shuffling in the table, Fundsmith Equity remained in the number one slot. In a recent communication with investors, manager Terry Smith said the fund, which appears in interactive investor’s Super 60 rated list of investments, had outperformed the MSCI World Index in the first six months of 2021, returning 13.1% versus 11.9%. Yet Smith stressed that if investors had “been reading what investment commentators have been saying during this period, you might be rather surprised that our fund has fared so well”. We explain why Smith made this comment here.
Baillie Gifford Positive Change rose two places to take the coveted second spot. It is the highest-ever top 10 position for the global fund since it broke into the top 10 rankings in May 2020. Positive Change, which appears on our ACE 40 list of ethical investments, was one of several funds recently highlighted by interactive investor writer Douglas Chadwick as having “returned 5% every six months over a three-year period”.
- Baillie Gifford: 15 investments you’ve never heard of
- Find out why Baillie Gifford Positive Change is on the ii ACE 40 list
- Terry Smith: outperformance during value rally tells its own story
Chadwick explains that “it is very unusual to find a fund that has managed to achieve the target in all six of the six-month periods, but we can usually find a handful that have done it five out of six times”. Another fund identified by Chadwick as among the most consistent was L&G Global Technology Index, which was the sixth-most bought fund on the interactive investor platform in August.
Baillie Gifford American slipped from second to fourth place in our top 10 most-bought funds list. Its performance has been a little bumpy, as Chadwick points out. At the time of writing, the American fund’s top three holdings are Canadian e-commerce platform Shopify (NYSE:SHOP, Covid vaccine manufacturer Moderna (NASDAQ:MRNA) and The Trade Desk (NASDAQ:TTD), a technology platform allowing clients to manage digital advertising campaigns.
During August, interactive investor published its annual review of its six Quick-start Funds, which are aimed at investors across a range of risk profiles and life stages. The review considered “value for money, through to risk-adjusted returns, consistency, philosophy, process, size and scale”. Of the six Quick-start Funds, two are from the well-known Vanguard LifeStrategy range, namely the 80% Equity and 60% Equity options. In August, those multi-asset funds were the third and fifth most-bought funds, respectively, on the ii platform.
Dzmitry Lipski, head of funds research, interactive investor, says: “The Vanguard LifeStrategy range stands out for its clear and defined strategy, low cost, and strong long-term track record of outperformance since inception in 2011. The range has the most consistent risk-adjusted returns relative to peers.”
The Vanguard LifeStrategy 100% Equity option was the seventh-most bought fund in August, but it does not appear in our Quick-start range. The only other passive fund in the top 10 table in August was Vanguard US Equity Index, which rose one place to eighth from July. Passive funds comprised half the top 10 table in August.
The new entry, in 10th place, was Rathbone Global Opportunities. According to its latest factsheet dated 31 July, its top 10 holdings include laboratory instrument manufacturer Sartorius Stedim Biotech (EURONEXT:DIM), digital payments company PayPal (NASDAQ:PYPL), and digital design technology firm Adobe (NASDAQ:ADBE). The fund has a 65% exposure to the US and 26% of the portfolio is invested in Europe. In terms of sectors, the biggest weighting is to tech (19%) followed by consumer discretionary (17.5%) and financials (17.2%). Managers James Thomson and Sammy Dow invest in a small number of global stocks (60 holdings at the time of writing) and their “sweet spot is mid-sized growth companies in developed markets”.
- Check out our award-winning stocks and shares ISA
- History suggests markets are heading for a correction
LF Blue Whale Growth fund moved up the table from 10th place to ninth. In August, manager Stephen Yiu announced that Blue Whale Growth had added US firm NVIDIA (NASDAQ:NVDA) to the portfolio as a top 10 holding. interactive investor equity analyst Keith Bowman said: “Nvidia’s chip computing abilities are touching on areas from gaming, cloud computing, artificial intelligence and robotics to self-driving cars, genomics and crypto currency mining.” The global fund has 29 holdings in total.
The fund that exited the top 10 in August was Baillie Gifford Managed.
Top 10 most-popular investment funds: August 2021
|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||24.7||60.4|
|2||Baillie Gifford Positive Change||Global||Up 2||44.8||140.3|
|3||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||No change||19.8||29.6|
|4||Baillie Gifford American||North America||Down 2||34.7||149.9|
|5||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||No change||14.7||25.8|
|6||L&G Global Technology Index||Technology & Telecommunications||No change||31.6||105.2|
|7||Vanguard LifeStrategy 100% Equity||Global||No change||24.8||33.2|
|8||Vanguard US Equity Index||North America||Up 1||28.5||52.9|
|9||LF Blue Whale Growth||Global||Up 1||21.2||68|
|10||Rathbone Global Opportunities||Global||New entry||24.7||62|
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.