Top 10 most-popular investment funds: October 2022
1st November 2022 14:16
by Nina Kelly from interactive investor
Investors buy new funds in a month of political and market turmoil in the UK.
As our performance table below shows, investors in active funds have had their fingers burned over the past year, and recent research revealed record outflows from funds in September. A total of £27.9 billion was withdrawn, with active funds experiencing the greatest outflow at £25.2 billion.
In our top 10 table for October, which is based on the number of ‘buys’ among interactive investor customers during the month, there are just two active strategies: the Super 60-rated Fundsmith Equity and Royal London Short Term Money Market fund.
- Read about: Free regular investing | Opening a Stocks & Shares ISA | Cashback Offers
Terry Smith’s flagship fund remains at the top of the most-bought table, with the star investor disclosing that he’s just bought technology shareApple (NASDAQ:AAPL), which announced record results during the third-quarter US earnings season. However, while interactive investor’s latest quarterly Private Investor Performance Index highlights the enduring popularity of Smith’s fund, and separate figures on regular investment data show that Fundsmith Equity is the most-popular regular investing option on the platform, not all DIY investors are sticking by him, with ii’s Alice Guy recently explained why she has sold her holding.
Amid a month full of government U-turns, resignations, and further intervention from the Bank of England in the bond market, cautious retail investors turned to low-risk money market funds, with the Royal London Short Term Money Market fund entering the top 10 table in eighth place.
Money market funds are a cash-like investment and the return increases as interest rates rise. Saltydog Investor wrote about the Royal London fund recently and highlighted recent gains. Because of market volatility and rising interest rates, money market funds may suit investors seeking to reduce the overall risk of their portfolio. Such funds also allow investors to park their cash ahead of in future returning to the stock market in an attempt to ‘buy the dip’, when the right opportunities present themselves.
Money market funds can be held inside a self-invested personal pension (SIPP), a stocks and shares ISA, or a general investment account. The fund managers running such funds can invest in a variety of financial products, including short-dated government bonds, and they have access to products that aren’t available to DIY investors, and thus may be able to secure better rates. Money market funds invest in liquid assets, so managers can buy and sell the financial instruments quickly.
- 10 things to know about money market funds versus cash savings
- Six tips for short-term investors
- 10 things to know about investing in volatile markets
The Royal London Short Term Money Market fund is one of ii’s Investment Pathways options for investing in drawdown to access all or part of your pension. The Royal London option is for those planning to take out all their money within the next five years. The ongoing charges figure is 0.10%.
Against a turbulent macroeconomic backdrop that includes the ongoing war in Ukraine, rising inflation, increasing interest rates on both sides of the Atlantic, and concerns over China’s economy, investors are also seeking safety in low-cost diversified options and there are a multitude of global funds in the top 10 most-bought table. One new index tracker in our ranking is HSBC's FTSE All-World Index in 10th place.
Vanguard has six of its passive funds in the table, including three LifeStrategy funds, two of which form part of interactive investor’s Quick-start funds range; the 60% Equity and 80% Equity options are in sixth and second place, respectively. The 100% Equity fund has moved up one place to third, while the Vanguard FTSE Global All Cap Index fund and US Equity Index fund are in fourth and fifth place, respectively.
The Vanguard FTSE Dev World ex-UK Equity Index, in seventh place, shows how investors are continuing to shun the UK, while L&G Global Technology Index fell two places to ninth place.
HSBC American Index and Fidelity Index World, which were new entries last month, both exited the top 10.
Top 10 most-popular funds in October 2022
| Rank | Fund | IA sector | Ranking change since previous month | 1-year return to 1 Nov (%) | 3-year return to 1 Nov (%) |
| 1 | Fundsmith Equity | Global | No change | minus 12.4 | 24.3 |
| 2 | Vanguard LifeStrategy 80% Equity | Mixed investment 40%-85% shares | No change | minus 7.9 | 14.3 |
| 3 | Vanguard LifeStrategy 100% Equity | Global | Up 1 | minus 4.9 | 22.8 |
| 4 | Vanguard FTSE Global All Cap Index | Global | Up 1 | minus 5.7 | 27.6 |
| 5 | Vanguard US Equity Index | North America | Down 2 | minus 2.0 | 45.1 |
| 6 | Vanguard LifeStrategy 60% Equity | Mixed investment 40%-85% shares | No change | minus 10.6 | 6.2 |
| 7 | Vanguard FTSE Dev World ex-UK Equity Index | Global | Up 1 | minus 4.1 | 34 |
| 8 | Royal London Short Term Money Market | Short Term Money Market | New entry | 0.85 | 1.2 |
| 9 | L&G Global Technology Index | Technology & Telecommunications | Down 2 | minus 18.7 | 53.9 |
| 10 | HSBC FTSE All-World Index | Global | New entry | minus 4.7 | 30.2 |
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of October.
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.