All change for Baillie Gifford and Vanguard, as a new fund enters our most-bought list.
Baillie Gifford’s showing in our ranking of the most-popular funds in May, which is based on the number of buys by interactive investor customers, remains unchanged from April, with just three funds in the table. The asset manager continues to play second fiddle to Vanguard, which has a total of four funds in the ranking.
Baillie Gifford American has fallen outside the top three, and is now in fourth place, with Vanguard LifeStrategy 60% Equity taking third place and Vanguard LifeStrategy 80% Equity still in second place. Vanguard’s 100% Equity fund option, for those with a higher-risk appetite, has jumped one place to sixth position.
The Vanguard passive funds, two of which appear in interactive investor’s Quick-start funds’ list, offer investors exposure to thousands of global stocks, with the level of diversification hopefully providing portfolios with some protection. Diversification also helps to manage risk in an inflationary environment.
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While investors are returning to the UK market, as demonstrated by the appearance of another UK-focused fund in May’s table that is discussed below, investors are still largely favouring global plays, as evidenced by the continued popularity of the Vanguard funds, Fundsmith Equity (in first place), Baillie Gifford Positive Change (seventh), and Baillie Gifford Global Discovery (ninth).
While the progression of the vaccination programme in the UK is going well, the threat of new variants and a warning from scientists that a third wave of Covid-19 may already be under way could derail plans to end lockdown restrictions on ‘freedom day’ on 21 June. While investors wait to see whether the spread of new Covid variants will translate into another stop-start for the UK economy, the Organisation for Economic Cooperation and Development (OECD) has upgraded its view for UK growth. It has forecasted that UK GDP will rise by 7.2% in 2021, the fastest growth since 1941, after a 9.8% contraction in 2020.
May’s new entry is the UK small and mid-cap fund MI Chelverton UK Equity Growth (10th place). The fund currently counts media group Future (LSE:FUTR) and Vitec (LSE:VTC), which makes camera equipment for photographers and videographers, among its top 10 holdings. Other stocks in the portfolio include medical diagnostic firm ANGLE (LSE:AGL), management consultancy services’ company Elixirr International (LSE:ELIX), re-commerce business MusicMagpie (LSE:MMAG) and digital competition organiser Best of the Best (LSE:BOTB). In terms of sector breakdown, its top three weightings as at 30 April are: technology (15.8%), support services (14.1%), and healthcare (11.3%). Figures for March – the latest available – reveal that the UK All Companies sector, which is the Investment Association sector housing the MI Chelverton UK Equity Growth fund, received its first inflows for six months in March.
The only other UK-focused fund in the table, Marlborough Nano Cap Growth, jumped three places to fifth place. The fund, which is in the IA UK Smaller Companies sector, was a standout performer during the pandemic and year-to date has returned 80.4%.
Top 10 most-popular investment funds: May 2021
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 1 June (%)||3-year return to 1 June (%)|
|1||Fundsmith Equity||Global||No change||17.3||54.5|
|2||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||No change||17.6||26.1|
|3||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||Up one place||12.7||22.7|
|4||Baillie Gifford American||North America||Down one place||54.5||150.7|
|5||Marlborough Nano Cap Growth P||UK Smaller Companies||Up three places||80.4||72.5|
|6||Vanguard LifeStrategy 100% Equity||Global||Up one place||22.5||29.2|
|7||Baillie Gifford Positive Change||Global||Down two places||47.03||119.1|
|8||Vanguard US Equity Index||North America||Down two places||25.3||51.8|
|9||Baillie Gifford Global Discovery||Global||No change||28.4||81.2|
|10||MI Chelverton UK Equity Growth||UK All Companies||New entry||67.3||73.1|
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of May.
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.
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