Baillie Gifford’s popularity slips further as a new fund joins the top 10.
The demand for Baillie Gifford funds continues to soften, according to our monthly ranking of the most-bought funds, which is based on the number of buys among interactive investor customers.
Baillie Gifford now has only two funds in the table, down from three last month and five in March 2021. However, both Baillie Gifford American (third place) and Baillie Gifford Positive Change (fifth place), have moved up our ranking since May.
Growth-oriented Baillie Gifford American has a large exposure to technology (29% of the portfolio) and its style of investing could suffer as the shift away from growth shares and towards value shares continues. The fund’s current top three holdings are Shopify (NYSE:SHOP), Wayfair (NYSE:W) and Amazon (NASDAQ:AMZN).
Baillie Gifford Positive Change appears on interactive investor’s ACE 40 list of ethical investments and co-manager Lee Qian recently shared examples of how the team’s ESG (environmental, social and governance) approach and engagement with company management, including at Moderna (NASDAQ:MRNA) and Umicore (EURONEXT:UMI), can help businesses do good. The Positive Change fund adopts a concentrated approach with 34 holdings, as of 31 March. Investments include plant-based burger-maker Beyond Meat (NASDAQ:BYND), online learning platform Coursera (NYSE:COUR) and water technology company Xylem (NYSE:XYL). The fund was recently identified as one of eight global funds falling within the top 10% of performers during the Covid-fuelled market sell-off and recovery.
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Another fund adopting a concentrated approach is Terry Smith’s Fundsmith Equity, which remains the most popular fund on the interactive investor platform. One of our specialist writers recently suggested why a concentrated approach may be less risky despite conventional investing wisdom suggesting the opposite.
Passive strategies now account for half the funds in the ranking, with L&G Global Technology Index the only newcomer in this month’s list (10th place). Another writer explained this week that he has gone back into tech funds, including L&G Global Tech Index.
The other passive plays in the top 10 are all from the Vanguard stable and include three of its multi-asset LifeStrategy funds: 80% Equity (second place); 60% Equity (fourth) and 100% Equity (sixth); as well as Vanguard US Equity Index (seventh). Global markets hit record highs last week, buoyed by the agreement of a $1 trillion US infrastructure package.
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Investors continue to favour domestic funds and the two UK-focused names that appeared in the last top 10 ranking remain in the table. Marlborough Nano Cap Growth, which as its name suggests focuses on small companies, is in eighth place while MI Chelverton UK Equity Growth, which invests in small and mid-cap firms, is in ninth place. Investor appetite for the UK market could be increasing owing to the face that the country appears set for a lifting of social restrictions later this month after making good progress with delivering vaccines in the race against the Delta variant.
Top 10 most-popular investment funds: June 2021
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 1 July (%)||3-year return to 1 July (%)|
|1||Fundsmith Equity||Global||No change||24.4||61|
|2||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||No change||18.6||29.9|
|3||Baillie Gifford American||North America||Up 1||61.9||176.4|
|4||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||Down 1||13.4||25.5|
|5||Baillie Gifford Positive Change||Global||Up 2||49.3||136.5|
|6||Vanguard LifeStrategy 100% Equity||Global||No change||23.8||34.1|
|7||Vanguard US Equity Index||North America||Up 1||28.6||58|
|8||Marlborough Nano Cap Growth P||UK Smaller Companies||Down 3||79.9||72.2|
|9||MI Chelverton UK Equity Growth||UK All Companies||Up 1||62.9||73.6|
|10||L&G Global Technology Index||Technology & Telecommunications||New entry||33.9||109.5|
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of June.
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