One new entry, a rising star, and a further decline in support for passive investment options.
Ethical fund Baillie Gifford Positive Change entered the top 10 most-bought funds list in May in ninth place and has since ascended five places to the fourth spot in our league table, which is based on data from interactive investor, Money Observer’s parent company.
The £278 million fund, overseen by five fund managers, seeks to invest in firms that can deliver positive social change in social inclusion and education, environment and resource needs, healthcare and quality of life, and “base of the pyramid” (addressing the needs of the world’s poorest people).
Some investors perhaps piled in after reading about the success of the Positive Change fund in the annual Money Observer Fund Awards at the end of June. The fund collected two gongs: the best large global growth fund award and the best equity-focused ethical/SRI fund award.
Above its fourth-place position in the table, sit Fundsmith Equity, Baillie Gifford American, and Vanguard LifeStrategy 80% Equity. The trio retain their lofty positions of first, second and third, respectively. In a pandemic-ravaged world, could Baillie Gifford American – with its arsenal of “lockdown champions” and future-facing stocks - pose a serious threat to Fundsmith Equity’s long-held number one spot?
The table’s only newcomer, Baillie Gifford Long Term Global Growth, arrives in the 10th spot and has a weighting of at least 90% to equities. The fund was launched in 2017 and its managers, which include Tom Slater, who is also co-manager of Scottish Mortgage investment trust, are free to invest in any firm in any country provided it has a market cap of $2 billion (£1.6 billion). The fund currently has 56.8% exposure to the US, and 24.8% to Emerging Asia. Its largest holding is Amazon, and other stocks in its top 10 include Tesla, Alibaba, and Netflix.
The fund’s arrival in the list means that Baillie Gifford now has a total of four funds in the most-bought table, including Baillie Gifford Global Discovery, which has fallen one place to fifth. The fund is heavily exposed to healthcare and tech and counts UK-listed online grocery retailer Ocado among its top 10 holdings.
In June, the number of passive funds in the table continued to shrink and now totals three, down from four, following the disappearance of Vanguard Life Strategy 100% Equity. There are now only two Vanguard funds in the top 10.
Two funds that experienced minor positive movements – each rising by one spot - are Vanguard’s LifeStrategy 60% Equity, now in sixth place, and Lindsell Train Global Equity, now in the seventh slot. The multi-asset Vanguard fund could be viewed as a one-stop shop for investors who want a simple solution, or as a core holding surrounded by spicier satellite investments.
The remaining funds that make up the top 10 – L&G Global Technology Index Trust and Polar Capital Global Technology – each fell by three places to eighth and ninth place, respectively. The waning popularity of the index-tracking L&G fund can perhaps be explained by the shift investors seem to be making from passive to active management – despite the higher charges – in the hope that professionals handpicking resilient stocks can best protect their investments.
|Rank||Fund||IA sector||Ranking change since
to 1 Jul
to 1 Jul
|1||Fundsmith Equity||Global||No change||9.20%||49%|
|2||Baillie Gifford American||North America||No change||53.60%||138.20%|
|3||Vanguard LifeStrategy 80% Equity||Mixed Investment 40%-85% Shares||No change||2.30%||17.70%|
|4||Baillie Gifford Positive Change||Global||up 5||51%||109.70%|
|5||Baillie Gifford Global Discovery||Global||minus 1||36.40%||96.20%|
|6||Vanguard LifeStrategy 60% Equity||Mixed Investment 40%-85% Shares||up 1||3.60%||17.10%|
|7||Lindsell Train Global Equity||Global||up 1||1.80%||49.50%|
|8||L&G Global Technology Index||Technology & Telecommunications||minus 3||38.60%||95.30%|
|9||Polar Capital Global Technology||Technology & Telecommunications||minus 3||31.50%||87.70%|
|10||Baillie Gifford Long Term Global Growth||Global||new entry||59.80%||122.80%|
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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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.