Top 10 most-bought investment funds: January 2025
Low-cost passive funds and tech exposure remain investors’ priorities.
3rd February 2025 16:14
by Nina Kelly from interactive investor
The last week of January concluded with Chinese AI firm DeepSeek unnerving investors with news that it could be much cheaper than existing US competitors, resulting in NVIDIA Corp (NASDAQ:NVDA) experiencing the biggest one-day slide in stock market history, followed by an announcement on 31 January on Trump tariffs.
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So, while it’s too early for any impact from either showing up in investor fund-buying behaviour for January, next month’s data will reveal whether enthusiasm on US tech exposure is waning, and whether investors shift strategy in light of Trump’s tariffs on Canada, Mexico, China, the European Union and, possibly, the UK.
Meanwhile, in January, the top three funds retained their places, with Royal London Short Term Money Market, L&G Global Technology Index Trust, and Vanguard LifeStrategy 80% Equity in first, second and third place, respectively.
The Bank of England is expected to cut interest rates on Thursday, which will impact the return on the diversified low-risk Royal London Short Term Money Market fund, which is the only actively managed fund in the top 10. The yield on this fund is currently 4.80% (according to its latest factsheet, dated 31 Dec 2024), but this will fall when the base rate comes down, with lower rates meaning lower yields.
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As my colleague Sam Benstead observed in a “Fund Battle” article focused on money market funds, the Royal London fund’s performance has been strong, and over five years it has delivered a total return, net of fees, of 12.5%.
The yearly ongoing charge of 0.10% helps explain its attraction, although the article stresses that it is not the only money market fund worth considering and lists 16 funds aiming for cash-like returns. Indeed, Royal London’s 10-year performance figure is slightly behind the return for abrdn Sterling Money Market I Acc fund, for example.
Passive index funds offering exposure to the US, such as L&G Global Tech Index, Vanguard US Equity Index, and UBS S&P 500 Index C Acc remained popular with investors. Although the L&G fund is strictly the only pure-play tech fund, because of the dominance of the “Magnificent Seven” US tech shares in the S&P 500, the other two funds have large weightings to US tech as a result. The one-year and three-year returns for these three funds outpace the performance figures for the other seven funds in the top 10.
Vanguard LifeStrategy 80% Equity is joined in the top 10 funds table by the 60% Equity and 100% Equity options. All these multi-asset funds were recently suggested as potential ideas for ISA investors, according to their age, goals and risk appetite.
Two recent video interviews with Vanguard’s Mohneet Dhir, addressed the LifeStrategy range’s “home bias” to UK shares, the investment formula, and forecast returns.
- Watch our video: Vanguard LifeStrategy defends ‘home bias’ to UK shares
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Dhir attributes home bias to “client preference”, and the issue was discussed on the ii Community app, with a poll answered by 592 contributors revealing that 55% agreed that Vanguard should have a home bias.
For investors who aren’t seeking significant exposure to the UK, they might consider a few funds that appear in the top 10 table, including Fidelity Index World (fourth place), HSBC FTSE All-World Index (seventh place), and Vanguard FTSE Global All Cap Index (seventh place).
These funds all sound as though they are the same, given that they have “world” and “global” in their titles, but the exposure and costs vary. Fidelity Index World (OCF 0.12%) concentrates on developed markets, while the HSBC (OCF 0.13%) and Vanguard (0.23%) index funds include emerging market shares.
Top 10 most-popular investment funds in January 2025
Rank | Fund | Change on last month | One-year return (%) | Three-year return (%) |
1 | No change | 5.20% | 12.3% | |
2 | No change | 32.6% | 73.8% | |
3 | No change | 16.1% | 24.7% | |
4 | Up one | 23.6% | 44.7% | |
5 | No change | 25.4% | 51.2% | |
7 | No change | 22.9% | 38.9% | |
7 | Up one | 20.5% | 37.8% | |
8 | Down one | 19.9% | 35.6% | |
9 | No change | 12.4% | 14.7% | |
10 | No change | 25.6% | 52% |
Source: interactive investor/FE FundInfo. Performance data to 3 February 2025. Note: the top 10 is based on the number of “buys” during the month of January.
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.