Interactive Investor

Top 10 most-popular investment funds: August 2023

Global funds dominated the most bought list last month as investors looked to capture returns from shares around the world.

1st September 2023 12:16

by Sam Benstead from interactive investor

Share on

Most-bought funds 600

There was very little change to the most-bought fund list in August, as investors continued to back Terry Smith’s Fundsmith Equity fund and track markets with low-cost passive funds.  

Despite the continued backing by interactive investor customers, Smith’s flagship strategy is trailing its benchmark, the MSCI World index, this year. Fundmsmith Equity is up 8.8% compared with 9.9% for its benchmark in 2023. However, it is still ahead of the 6.7% return for the typical global equities stock picker. 

One of only two active funds on the list, Smith buys companies that have strong moats around their businesses and are still growing steadily. His tops stocks include tech firms Microsoft and Meta (formerly called Facebook), as well as healthcare groups like Novo Nordisk, alongside consumer companies such as LVMH and L'Oreal.  

The second most-popular fund is also actively managed: Royal London Short Term Money Market. This fund owns low-risk bonds set to mature soon in order to collect a safe income for investors. It currently yields around 5%.  

This strategy has seen its popularity soar this year as interest rates have risen, which has pushed up the yields on bonds.  

Unchanged in third and fourth place were Vanguard LifeStrategy 80% Equity and L&G Global Technology Index. The artificial intelligence boom is boosting performance for the latter passive fund, which has returned 37% this year. Investors should note that it has become extremely concentrated in just a handful of shares: Apple makes up nearly 20% of the portfolio and Microsoft is 16.5%. 

Two movers this month were Vanguard LifeStrategy 100% Equity and Vanguard FTSE Global All Cap Index, rising one place each to fifth and sixth.  

Both tracker funds capture the returns of global shares, with Vanguard’s Global All Cap fund owning shares on a market cap-weighted basis, meaning it owns more than 7,000 funds ranked by their market cap, and LifeStrategy 100% owning a basket of Vanguard index funds. Vanguard’s LifeStrategy approach takes measures to avoid overconcentration in US shares and has more invested in the UK.  

In seventh place, down two spots on last month, was the Super 60-rated Vanguard US Equity Index.

Up one to eighth place was the Vanguard FTSE Developed World Ex UK Index, while L&G Global 100 Index held onto tenth place. Both are global funds, with the nuances that Vanguard’s strategy strips out UK shares, and L&G’s fund owns just 100 of the largest and most global shares in the world. Both have been top performers due to their high concentration in US shares.  

HSBC FTSE All World Index was a new entry in ninth. For a yearly fee of just 0.13%, it tracks around 3,500 global shares, excluding emerging markets. The Vanguard global tracker fund mentioned above includes emerging markets and costs 0.14% in fees. Meanwhile, L&G Global 100 Index also costs 0.14%. 

Dropping off the list this month was Fidelity Index World, another global tracker fund.  

FundIA SectorRanking change from previous month1-year return to 1 September (%)3-year return to 1 September (%)
Fundsmith EquityGlobalNo change6.919.8
Royal London Short Term Money MarketShort Term Money MarketNo change3.94.3
Vanguard LifeStrategy 80% EquityMixed investment 40%-85% sharesNo change2.519.2
L&G Global Technology IndexTechnology and Technology InnovationsNo change18.942.2
Vanguard LifeStrategy 100% EquityGlobalUp one4.531
Vanguard FTSE Global All Cap IndexGlobalUp one3.929.5
Vanguard US Equity IndexNorth AmericaDown two4.637.8
Vanguard FTSE Developed World Ex UK IndexGlobalUp one4.833.5
HSBC FTSE All World IndexGlobalNew entry3.329.4
L&G Global 100 Index TrustGlobal No change7.342.3

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.

Get more news and expert articles direct to your inbox