Top 10 most-popular investment funds: December 2024
We examine the most-bought funds on the platform, with one new entry joining the top 10.
2nd January 2025 13:28
by Nina Kelly from interactive investor
All the top 10 funds in December, bar number-one ranked Royal London Short Term Money Market, were passive.
The return of the Royal London fund is linked to the Bank of England base rate, which was held at 4.75% at December's meeting, with the next interest-rate decision due in February.
As interest rates start to fall, so too will the yield on the Royal London fund. However, while several interest rate cuts are anticipated this year, with the base rate estimated to drop to 3.75%, the pace of cuts has been slower than expected, leaving investors free to enjoy this money market fund's low-risk return for a little longer.
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Money market funds can be held inside ISAs and self-invested personal pension (SIPPs) and invest in cash-like instruments, including short-dated government bonds.
A new entry, in 10th place, is the UBS S&P 500 Index fund. Although this passive fund is an S&P 500 tracker, it has a 31.3% weighting to technology because of the dominance of the so-called Magnificent Seven mega-cap tech shares. Consequently, Apple Inc (NASDAQ:AAPL), NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc Class A (NASDAQ:META), Alphabet Inc Class A (NASDAQ:GOOGL) and Tesla Inc (NASDAQ:TSLA), are all in this fund's top 10 alongside Warren Buffett's Berkshire Hathaway Inc Class B (NYSE:BRK.B) and semi-conductor manufacturer Broadcom Inc (NASDAQ:AVGO). Investors can own this fund for 0.09% (ongoing charges figure) a year.
Vanguard US Equity Index (unchanged in fourth place), is another US-focused passive fund that is similarly exposed to technology, so investors must be mindful of the same concentration risk when owning it. The fund's OCF is 0.10%.
L&G Global Technology Index Trust is pure-play tech and its one and three-year return figures, 37.7% and 52.4% respectively, are the highest in December's top 10. Performance has been turbocharged by excitement surrounding the Magnificent Seven and the promise of artificial intelligence (AI), and the fund made it on to interactive investor's list of the top 10 best funds of 2024.
Actively managed Jupiter India, meanwhile, fell out of the top 10. Although investor demand for this emerging market fund has waned somewhat, Fidelity International predicts that India will still be a bright spot for long-term investors in 2025, even though the market rose 13.5% in 2024.
Overseas investing expert Rodney Hobson is also bullish on the subcontinent, arguing that “all the ingredients that helped China to leap forward are present and there are several positive extras as well”. In his 2025 outlook for the country, Hobson adds that it is reasonable to argue that India is in “the early stages of an economic miracle”.
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Passive funds from the Vanguard stable accounted for half of the top 10 in December, with its 60% Equity, 80% Equity and 100% Equity funds in third, seventh and ninth place respectively. Investors like these one-stop shop funds for their simplicity and low cost.
Three other popular global trackers that made the top 10 were Fidelity Index World P Acc, (OCF is 0.12%) HSBC FTSE All-World Index C Acc (0.13%) and Vanguard FTSE Global All Cap Index £ Acc (0.23%).
As ii has pointed out before, there are subtle differences between the three, one of which is that the Fidelity fund invests solely in developed markets, while the HSBC and Vanguard funds also track emerging market indices.
Fundsmith Equity remained outside the top-10 funds for the third month in a row, having last featured in 10th place in September. Terry Smith’s £22.5 billion global fund now ranks behind global stock market tracker funds over one, three and five years, but is ahead still over the past decade.
Poor recent returns are no doubt causing investors to reconsider their faith in the star fund manager, although if tech shares falter, his strategy is likely to outperform again as he has just 12.6% invested in the Information Technology sector.
Top 10 most-popular investment funds in December 2024
Rank | Fund | Change on last month | One-year return (%) | Three-year return (%) |
1 | Up one | 5.3 | 11.9 | |
2 | Up one | 37.7 | 52.4 | |
3 | Down two | 13.2 | 15.4 | |
4 | No change | 25.7 | 34.7 | |
5 | No change | 21 | 30.2 | |
6 | No change | 19.4 | 27.1 | |
7 | No change | 16.8 | 24.2 | |
8 | No change | 18.3 | 24.8 | |
9 | No change | 9.7 | 7.2 | |
10 | New entry | 27.6 | 39.4 |
Source: interactive investor/FE FundInfo. Performance data to 31 December 2024. Note: the top 10 is based on the number of “buys” during the month of December.
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