Top 10 most-bought investment funds: September 2024
All change at the top of the table, and is Terry Smith’s flagship fund in or out?
1st October 2024 14:11
by Nina Kelly from interactive investor
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We have a new number one fund in our monthly ranking of the most-bought funds among ii customers: Vanguard LifeStrategy 80% Equity.
The low-cost multi-asset fund, along with other funds in the range, was recently profiled in our latest Fund Spotlight article, where interactive investor’s analysts discussed the strong long-term track record of the passive range, alongside other topics, including “home bias” to the UK.
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In each fund, UK shares represent 25% of the equity allocation. This may or may not trouble you depending on your long-term view of UK companies, and your thoughts on the potential for a significant tech correction in the US. As our analysts point out, the UK portion of the portfolio could function as useful ballast under such a scenario.
The 80% Equity fund appeals to beginners and sophisticated investors alike because of its global diversification and low cost of just 0.22% a year. For example, for every £1,000 you invest, just £2.20 goes on management costs.
The 80% Equity fund is one of interactive investor’s six Quick-start Funds, meaning that it is seen as offering beginners “a simple starting point”, functioning as a one-stop shop. Therefore, investors who go down this route don’t have to buy multiple investments unless they choose to.
- Fund Spotlight: why we like Vanguard LifeStrategy
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The 60% Equity and 100% Equity LifeStrategy funds also appear in the top 10 table, in fifth and ninth place, respectively.
Elsewhere, Fundsmith Equity crept back into the top 10 last month, in 10th position. It fell out of the top 10 monthly most-bought funds in August for the first time since 2018 (when ii began monitoring its most-bought investments).
The performance of the £22.7 billion global fund has suffered in the short term, owing to manager Smith choosing not to have NVIDIA Corp (NASDAQ:NVDA) in the portfolio, and the dominance of a small number of technology stocks.
Smith recently discussed performance with my colleague Kyle Caldwell in a wide-ranging interview that also covered his decision not to buy Nvidia, and why he thinks investors shouldn’t buy shares if they want income.
It remains to be seen whether Smith’s call on Diageo (LSE:DGE) is the right one. He sold out of the drinks giant in the summer, while fellow star fund manager Nick Train has the stock in both Lindsell Trian Global Equity and Lindsell Train UK Equity.
Meanwhile, pure-play tech fund L&G Global Technology Index fell from first to fourth place in September. The fund’s one and three-year performance figures are the second-highest in the top 10 table (only Jupiter India is higher), yet this fund has double-digit weightings to Apple Inc (NASDAQ:AAPL) (16.3%), Microsoft Corp (NASDAQ:MSFT) (15.2%) and Nvidia (14.1%), which could pose a problem for investors who aren’t sufficiently diversified if there is a major tech correction.
Specialist writer David Prosser explained in a recent feature how investors could protect themselves from a potential “tech wreck” by taking some profits and shared some ideas for where to put those profits to work.
Royal London Short Term Money Market moved up to second place. Returns on these low-risk money market funds are linked to the Bank of England rate and although interest rates are starting to fall, the returns on such funds are still attractive compared to savings accounts. The fund currently yields 5.02%, according to its latest factsheet (31 August).
Writing in one of his weekly Bond Watch column, our fixed income lead Sam Benstead explained how because “interest rates are forecast to fall to 4.5% by the end of this year and to 3.75% by the end of 2025…locking in a longer-term interest rate, even if yields are lower than shorter-term fixes, may deliver a higher total return”.
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- Five reasons why India is a ‘must-have’ in any portfolio
Jupiter India, meanwhile, ascended two places to third in September’s table. It has been a standout performer, and the strong returns of the fund explain its popularity among investors; over five years, it is up 128%.
Although Fundsmith’s re-entry into the top 10 means there are now three actively managed funds in the table, it is dominated by passives.
Among them, are HSBC FTSE All World Index (sixth place), Vanguard FTSE Global All Cap Index (seventh) and Fidelity Index World (eighth place). As these top 10 articles have pointed out before, a significant difference between the HSBC fund and the Fidelity Index fund is that the former includes emerging markets, while the latter is focused on developed markets.
Top 10 most-popular investment funds in September 2024
| Position | Fund | Change on last month | One-year return (%) | Three-year return (%) |
| 1 | Vanguard LifeStrategy 80% Equity | Up one | 18.8% | 17.5% |
| 2 | Royal London Short Term Money Market | Up one | 5.4% | 10.5% |
| 3 | Jupiter India | Up two | 39.8% | 76.8% |
| 4 | L&G Global Technology Index Trust | Down three | 34.7% | 52.4% |
| 5 | Vanguard LifeStrategy 60% Equity | Up four | 14.4% | 9.4% |
| 6 | HSBC FTSE All World Index | Down two | 20% | 28.5% |
| 7 | Vanguard FTSE Global All Cap Index | No change | 19.1% | 24.9% |
| 8 | Fidelity Index World | No change | 20.1% | 31.5% |
| 9 | Vanguard LifeStrategy 100% Equity | Down three | 18.6% | 25.3% |
| 10 | Fundsmith Equity | New entry | 13% | 12.5% |
Source: interactive investor. Performance data to 1 October 2024. 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.