Baillie Gifford is resurgent, passives strategies to the fore, and two new entries.
Baillie Gifford enjoyed a better showing in our ranking of the top 10 most-popular funds in July, according to the number of buys among interactive investor customers.
New arrival Baillie Gifford Managed joined the table in eighth place, meaning the Edinburgh-based asset manager had a total of three funds in the top 10. At the time of writing, global multi-asset fund Baillie Gifford Managed’s top three holdings were Canadian Amazon challenger Shopify (NYSE:SHOP); European manufacturer and seller of chemicals and food ingredients IMCD (EURONEXT:IMCD); and e-commerce giant Wayfair (NYSE:W).
Baillie Gifford Positive Change, in fourth place, was one of 2020’s top funds in terms of performance. Recent research from interactive investor revealed that the fund, which appears on ii’s ACE 40 rated list of ethical investments, was one of only a handful of ‘2020 winners’ that continued to outperform their benchmark in the first half of 2021. Since the start of the year, Baillie Gifford Positive Change had returned 11.6% to 1 July, compared to 10.7% for the Investment Association global fund sector average. In addition, the second quarter review of our ACE 40 list named Baillie Gifford Positive Change as the top performer among our ethical funds.
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Baillie Gifford American, however, which was also a top-performing fund last year and ranked second in this month’s most-bought funds’ list, failed to beat its benchmark in the first half of 2021. Yet this tech-heavy growth fund remains undoubtedly popular among investors and boasts an impressive long-term performance record, although there is no guarantee that this will be repeated in future, especially as the market rotation to value stocks continues. Recent figures shared by ii reveal that Baillie Gifford American is one of the top 10 most-bought Junior ISA investments in 2021.
Terry Smith’s Fundsmith Equity remained at the top of the most-bought funds list in July, and ii’s latest Private Investor Index confirmed its seemingly universal popularity with data showing that the fund is among the top 10 most-held investments by value across all six age categories (18 to 24; 25 to 34; 35 to 44; 45 to 54; 55 to 64 and 65+).
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Vanguard LifeStrategy 80% Equity, which was the third most-bought fund in July, is held across five investor age groups in the Private Investor Index. You can examine more Private Investor Index insights here.
Other passive options in July’s most-bought funds’ list included Vanguard LifeStrategy 60% Equity, in fifth place, Vanguard LifeStrategy 100% Equity in seventh place, and Vanguard US Equity Index, in ninth place. L&G Global Technology Index, rose four places to sixth place.
The other newcomer in July was the LF Blue Whale Growth, in 10th place. Lead manager Stephen Yiu recently told ii’s head of markets Richard Hunter that although the fund’s factsheet shows “70% exposure to US equities, because most of our companies in the US are global companies, if you look at the underlying revenue, where these companies are making money, we have less than 50% exposure to the US economy, and about 25% in Europe, including the UK, and 20% in Asia and the rest of the world”.
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Yiu added that under GICS (Global Industry Classification Standard) rules for sector allocation, the fund has “over 50% in technology, but for certain firms we would probably disagree with how GICS categorises them as tech. For example, Mastercard (NYSE:MA) or Visa (NYSE:V) is categorised as technology, but from our perspective they are more to do with financial services. So, based on the internal breakdown of the sector, we have only about 25% of the fund in technology.”
In terms of Blue Whale Growth’s top holdings, Yiu explained that “we do like certain businesses that are exposed to digital transformation, Adobe (NASDAQ:ADBE) being one. It is the market leader in content creation software in the world.
“We [also] like luxury brands such as Kering (EURONEXT:KER), which is the parent company of Gucci. We feel the valuation of Kering is pretty attractive at the moment. They are going to celebrate their 100th anniversary this year.” Yiu added that the portfolio also contains Nintendo, the gaming entertainment company.
Top 10 most-popular investment funds: July 2021
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 2 Aug (%)||3-year return to 2 Aug (%)|
|1||Fundsmith Equity||Global||No change||26.3||59%|
|2||Baillie Gifford American||North America||Up 1||48.1||166.8|
|3||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||Down 1||19.6||27.8|
|4||Baillie Gifford Positive Change||Global||Up 1||41.1||136.3|
|5||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||Down 1||14.2||24.7|
|6||L&G Global Technology Index||Technology & Telecommunications||Up 4||38.5||109|
|7||Vanguard LifeStrategy 100% Equity||Global||Down 1||25||30.6|
|8||Baillie Gifford Managed||Mixed investment 40%-85% shares||New entry||24.2||55|
|9||Vanguard US Equity Index||North America||Down 2||30.6||54.9|
|10||LF Blue Whale Growth||Global||New entry||23.1||69.1|
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of July.
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.