A new entry has appeared in our monthly ranking: which fund has caught investors’ attention?
Since last month, there has been a UK government U-turn on working from home, a swathe of lockdowns as Covid-19 second waves hit countries around the globe, and the first US presidential debate, but has anything changed in terms of investors’ fund preferences?
The most noteworthy feature of the monthly ranking of the top 10 most-bought funds, according to data from interactive investor’s platform, is the entry of Blue Whale Growth Fund in ninth place.
Blue Whale is an investment boutique set up by ex-Artemis fund manager Stephen Yiu, who you can hear in conversation with ii expert Richard Hunter here.
The Blue Whale Growth Fund – launched in September 2017 – is a global long-only equity fund focusing on large caps in developed markets. It has a highly concentrated portfolio (of 25 to 35 stocks) and the fund has significant exposure to technology, which currently accounts for 50% of its assets, and that has helped fuel performance.
Top holdings include Microsoft (NASDAQ:MSFT), Adobe (NASDAQ:ADBE), Visa (NYSE:V), Amazon (NASDAQ:AMZN), and software company Autodesk (NASDAQ:ADSK). Other sector exposure includes financial services (16.4%) and healthcare (13.3%). The fund has a strong weighting to the US (74%).
Terry Smith’s Fundsmith Equity, the biggest fund in the Investment Association (IA) Global sector with assets of £20.5 billion, continues its tenure in the number-one spot. Like the Blue Whale Growth Fund, Fundsmith Equity has a concentrated portfolio and a focus on large-cap growth stocks.
Meanwhile, investor appetite for second-place Baillie Gifford American, which counts Amazon and Netflix (NASDAQ:NFLX) among its top five holdings, shows no sign of waning, despite concerns from some commentators about the valuations being placed on many US FAANG stocks and next month’s US presidential election.
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Baillie Gifford Positive Change, an environmental, social and governance (ESG) fund which retains its third-place position, broke into the top 10 most-bought funds on the interactive investor platform in the summer.
As interactive investor’s head of personal finance Moira O’Neill pointed out: “Ethical investing is still chronically under-represented in platform best buy lists. We would like to think that ethical investing will become mainstream in the coming years as fund management groups realise that it does not have to compromise returns, and can, in fact, enhance it.”
Baillie Gifford Positive Change has mushroomed in size in recent months and is one of top 20 fastest-growing investment funds, according to ii writer Douglas Chadwick.
In all, funds in the Baillie Gifford stable accounted for five out of the top 10 fund purchases, with Baillie Gifford Global Discovery, Baillie Gifford Long-Term Global Growth (sixth) and Baillie Gifford Managed, in fifth, sixth and seventh place, respectively.
The Vanguard LifeStrategy 80% Equity and Vanguard LifeStrategy 60% Equity funds are in fourth and eighth place, respectively. Vanguard’s low-cost multi-asset passive range was launched in 2011, so the tracker funds have had a favourable market backdrop for much of their life, having only operated during a bull market for bonds and equities until Covid-19 struck.
Although the funds are in the IA’s Global category, both have 22.5% exposure to the UK. This may be something to bear in mind if you already have a good amount of exposure to your home market. UK shares are widely regarded as cheap right now, but there is potential for volatility as the end of the Brexit transition period approaches.
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At the bottom of the table, the Rathbone Global Opportunities fund has slipped one place to 10th spot, as investors continue to shun the UK and put their faith in overseas firms. This fund has a 62% weighting to the US and 21.9% to the eurozone, while its top holdings include healthcare business Sartorius Stedim Biotech SA (EURONEXT:DIM) and tech firm NVIDIA Corp (NASDAQ:NVDA).
Top 10 most popular funds: Sept 2020
|Rank||Fund||IA sector||Ranking change since previous month||1-year return to 1 Oct (%)||3-year return to 1 Oct (%)|
|1||Fundsmith Equity||Global||No change||13.5||57.23|
|2||Baillie Gifford American||North America||No change||100.94||186.39|
|3||Baillie Gifford Positive Change||Global||No change||72.53||126.1|
|4||Vanguard LifeStrategy 80% Equity||Mixed investment 40%-85% shares||No change||0.87||17.76|
|5||Baillie Gifford Global Discovery||Global||No change||59.54||109.35|
|6||Baillie Gifford Long-Term Global Growth||Global||No change||93.87||146.99|
|7||Baillie Gifford Managed||Mixed investment 40%-85% shares||+1||26.93||48.98|
|8||Vanguard LifeStrategy 60% Equity||Mixed investment 40%-85% shares||-1||1.78||17.21|
|9||LF Blue Whale Growth||Global||New entry||24.57||73.6|
|10||Rathbone Global Opportunities||Global||-1||27.42||63.97|
Source: Interactive investor and Morningstar. Note: the top 10 is based on the number of “buys” during the month of September.
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.