Top 10 most-popular investment funds September 2023
A sale at Terry Smith’s Fundsmith Equity, and a new active fund adds some spice.
2nd October 2023 14:33
by Nina Kelly from interactive investor
Our report about Fundsmith Equity manager Terry Smith selling a share he flagged as “concerning” was one of September’s most-read articles, racking up thousands of views. The star fund manager sold out of cosmetics group Estee Lauder (NYSE:EL) and replaced it with a new holding.
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Fundsmith Equity, which is one of interactive investor’s Super 60 investment ideas, was once again the most-bought fund in our top 10 ranking of the most-popular investment funds, according to the number of ‘buys’ among our customers in September.
“Smith has been relatively active over the past two years, selling out completely of a handful of companies, including Amazon (NASDAQ:AMZN), Estee Lauder, PayPal (NASDAQ:PYPL), Intuit (NASDAQ:INTU) and Adobe (NASDAQ:ADBE),” a colleague explained in a piece questioning the wisdom of retail investors copying popular buy-and-hold fund managers’ portfolios.
Meanwhile, the Royal London Short Term Money Mkt fund retained its spot in second place. It now offers income investors a yield of 5.19%, according to its August factsheet, following the Bank of England’s decision to hold interest rates at 5.25% this month.The return on money market funds’ low-risk, cash-like investments rise as rates climb. Saltydog Investor Douglas Chadwick is among those investing in the Royal London fund as a form of ‘portfolio protection’ during this period of elevated inflation.
But perhaps the most interesting entry in our top 10 list is active newcomer Jupiter India, in ninth place.
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The Indian stock market has been the best-performing index post-Covid, up an impressive 146% since 3 April 2020. The next-best performer by comparison is the Nasdaq, which is up 95%. So far in 2023, the Indian stock market is up 9.2%.
India has a colossal amount going for as an investment destination. With a youthful population of 1.4 billion people and an expanding middle class, the world’s largest democracy is predicted to become the third-biggest economy in the world by the end of the decade. Urbanisation is creating a demand for infrastructure, which further boosts the economy, and India may benefit from retail investors’ wariness over China’s economy and politics, and their distaste for its treatment of the Uighurs.
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“The Jupiter India fund run by Avinash Vazirani has had success in small and medium-sized companies that are sometimes overlooked,” wrote specialist writer Ceri Jones in a recent piece mulling whether investors should focus on China, India or Vietnam. The Jupiter India fund, which was launched in 2008, has a three-year return of 88%, and counts among its top 10 holdings tobacco manufacturer Godfrey Phillips, the State Bank of India, and healthcare firm Fortis Healthcare (according to its latest August factsheet). It’s top three sector exposures are financials (24.6%), consumer staples (15.9%), and healthcare (13.6%). The fund’s ongoing charges figure is 0.99% for the Jupiter I Acc share class, while the L Acc share class costs 1.74%.
Because the Jupiter fund is concentrated on a single country, there is a greater risk of turbulence. This is something that Saltydog Investor Douglas Chadwick, who has bought the India fund, highlights in a recent article. Chadwick says that although emerging market funds “may do well in the long run, investing in these countries is not for the faint-hearted” owing to the volatility. He goes on to list the improvements that Prime Minister Narendra Modi’s government has made in India - although a general election is due in 2024 – as he wonders whether it’s the country’s time to shine.
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The rest of the top 10 table is composed of passive funds, including four from Vanguard’s stable, namely long-term favourite Vanguard LifeStrategy 80% Equity (static in third place); Vanguard US Equity Index (unchanged in fifth place); Vanguard LifeStrategy 100% Equity (unchanged in sixth place); and Vanguard FTSE Global All Cap Index (down four places).
The L&G Global Technology Index fund is unchanged in fourth place; the L&G Global 100 Index is up two places to eighth, while HSBC FTSE All-World Index has risen to seventh place.
Falling out of the list this month was Vanguard FTSE Developed World Ex UK Index, a global tracker.
Top 10 most-popular investment funds in September 2023
| Rank | Fund | IA sector | Ranking change since previous month | 1-year return to 2 Oct (%) | 3-year return to 2 Oct (%) |
| 1 | Fundsmith Equity | Global | No change | 9.96% | 16.84% |
| 2 | Royal London Short Term Money Mkt | Short Term Money Market | No change | 4.17% | 4.79% |
| 3 | Vanguard LifeStrategy 80% Equity | Mixed investment 40%-85% shares | No change | 8.72% | 18.89% |
| 4 | L&G Global Technology Index | Technology and Technology Innovations | No change | 28.92% | 44.88% |
| 5 | Vanguard US Equity Index | North America | No change | 9.85% | 37.09% |
| 6 | Vanguard LifeStrategy 100% Equity | Global | No change | 11.31% | 31.37% |
| 7 | HSBC FTSE All-World Index | Global | Up two places | 8.92% | 30.60% |
| 8 | L&G Global 100 Index | Global | Up two places | 13.23% | 47.50% |
| 9 | India/Indian Subcontinent | New entry | 16.31% | 88.00% | |
| 10 | Vanguard FTSE Global All Cap Index | Global | Down four places | 9.96% | 29.16% |
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of September.
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