A new fund pops up in our monthly ranking as investors continue to think global and look East.
Two major macro events at the start of November, namely Joe Biden and Kamala Harris winning the race for the White House and the Covid-19 vaccine announcement from Pfizer (NYSE:PFE), combined to deliver a much-needed shot in the arm for global markets.
The incoming Biden presidency has raised hopes that one of the world’s largest economies will receive a substantial stimulus package, while vaccine ‘euphoria’ and updates about breakthroughs from Moderna (NASDAQ:MRNA) and AstraZeneca (LSE:AZN) also helped lift global markets. The Dow Jones broke the 30,000 barrier for the first time, while Elon Musk’s Tesla (NASDAQ:TSLA) was given the green light to enter the S&P 500, which delivered a huge boost to the tech stock, and those funds and trusts with significant exposure.
The FTSE 100, meanwhile, achieved its best month since 1989, with news of viable vaccines offering the prospect of a swifter recovery from the pandemic. But amid all the positivity, the spectre of a no-deal Brexit still looms over Britain as time to strike a trade deal runs out, and UK investors continue to shun their home market and favour global investment options.
Did November’s macro ‘noise’ alter investors’ fund-buying choices? In our monthly ranking of the top 10 most-bought funds, according to data from interactive investor’s platform, the top two funds remained the same: Fundsmith Equity and Baillie Gifford American.
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Investors remain loyal to Terry Smith’s global growth fund, but our columnist Jeff Prestridge recently debated the ‘hero status’ of fund managers and suggested that “Smith and [Nick] Train may be the last of this cult breed”. Meanwhile, Baillie Gifford American’s performance speaks for itself, demonstrated in the figures in the table below, with the fund delivering a one-year return to date of 110.5%, thanks to its exposure to big tech firms and the pandemic’s ‘Zoom boom’.
Investor appetite for China exposure continued and Baillie Gifford China usurped Baillie Gifford Positive Change’s number three spot as investors eye the speedy recovery from the pandemic that is taking place in Asia. However, the Baillie Gifford ESG (environmental, social and governance) fund remains popular among investors and has just been included in interactive investor’s ACE 40 rated list of ethical investments and was also the subject of a recent Fund spotlight feature.
Another Asia-focused fund and new entry to the list was Baillie Gifford Pacific, which joined in seventh place. The fund, which invests in the shares of companies in Asia (excluding Japan) and Australasia, was recently identified by one of our writers as being among the top 20 fastest-growing investment funds. At the time of writing, the fund’s biggest exposure was to China (53%) followed by Taiwan (9.2%), South Korea (8.7%), India (8.4%), and others. Among the portfolio’s top 10 holdings are internet company SEA Limited (NYSE:SE), e-commerce giant Alibaba (NYSE:BABA), food delivery firm Meituan (SEHK:3690) and insurer Ping An (SEHK:2318).
Another Asian-focused fund in favour among investors is Legg Mason IF Japan Equity, which kept its position in 10th place. The island nation offers investors - including Warren Buffett, who disclosed recent investments in the country - a multitude of opportunities at cheap prices.
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There was a little mid-table shuffling with the multi-asset Vanguard LifeStrategy 80% Equity fund - one of only two passive options in the table - rising two places to fifth place and Baillie Gifford Global Discovery falling two places to sixth. The Baillie Gifford fund, which is focused on the small-cap space, counts Ocado (LSE:OCDO), healthcare firm Teladoc (NYSE:TDOC), and US educational services firm Chegg (NYSE:CHGG) among its holdings, and was highlighted by our Saltydog investor as one of the most consistent performers over the past three years.
Low-cost passive fund Vanguard 60% Equity and Baillie Gifford Long-Term Global Growth kept their places at eighth and ninth, respectively. The latter fund is another offering from the Baillie Gifford stable that has enjoyed strong performance. To date, the fund has returned 96.3% over one year and 154.9% over three years.
Top 10 most popular funds: November 2020
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 1 Dec (%)||3-year return to 1 Dec (%)|
|1||Fundsmith Equity||Global||No change||16.6%||52%|
|2||Baillie Gifford American||North America||No change||110.5%||211.8%|
|3||Baillie Gifford China||China||+2||55.5%||57%|
|4||Baillie Gifford Positive Change||Global||-1||80.1%||137.8%|
|5||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||+2||6.3%||21.5%|
|6||Baillie Gifford Global Discovery||Global||-2||61.9%||123.9%|
|7||Baillie Gifford Pacific||Asia Pacific Excluding Japan||New entry||62.4%||73.8%|
|8||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||No change||6.5%||20.0%|
|9||Baillie Gifford Long-Term Global Growth||Global||No change||96.3%||154.9%|
|10||Legg Mason IF Japan Equity||Japan||no change||43.6%||66.9%|
Source: interactive investor and FE Analytics. Note: the top 10 is based on the number of “buys” during the month of November.
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.