There are two new entries in our monthly league table of the most popular funds, based on data from Money Observer’s parent company interactive investor.
There are signs investors are becoming more cautious in their outlook for equity markets, following the arrival of Investec Global Gold and Vanguard LifeStrategy 20% Equity into our league table of the 10 most popular funds in August (based on data from Money Observer’s parent company interactive investor).
Investec Global Gold has entered the top 10 in seventh position, up from 15th in July. The fact that the gold price is glittering has no doubt whetted investors’ appetites. So far this year, the precious metal has risen from $1,281 to $1,520 at the end of August, an increase of 18.7%.
The safe haven status of gold has come into its own at a time of heightened levels of macroeconomic uncertainty, including the prolonged US/China trade war and ongoing Brexit saga. But perhaps even more worrying is that the bond market has been sending warnings that a recession could materialise in the US within the next 18 months.
Investec Global Gold buys gold-mining companies, an approach viewed as riskier than simply buying bullion; but when times are good for gold, performance for such funds can be turbocharged. Investec Global Gold is a case in point, up a staggering 73.2% over the past year.
At times of market stress, often caused by wider economic uncertainties, it makes sense for investors to ensure that they are adequately protected, and one way to achieve this is through seeking out investments that are genuinely uncorrelated to the fortunes of equity markets. But the thing to bear in mind with specialist gold funds is that the tide can quickly turn, and if investors get their timing wrong they could be left nursing huge losses.
The other route investors have been using to increase exposure to defensive investments is through cautiously managed multi-asset funds, with Vanguard LifeStrategy 20% Equity entering our league table in 10th place. In July it was the 19th most-popular fund.
Interestingly, despite having a lower weighting to shares than other funds in the Vanguard LifeStrategy stable, over one year Vanguard LifeStrategy 20% Equity has outperformed Vanguard LifeStrategy 100% Equity, Vanguard LifeStrategy 80% Equity and Vanguard LifeStrategy 60% Equity, which all feature in our top 10 table.
The five funds in the range, which also include Vanguard LifeStrategy 40% Equity, invest in various indices, with the equity weighting ranging from 20% to 100% and the balance held in bonds and cash. Vanguard LifeStrategy 20% Equity has also slightly outperformed Vanguard LifeStrategy 40% Equity over one year, returning 9.9% versus 8.7%.
The rest of the top 10 names are no strangers to the table, with Fundsmith Equity, Lindsell Train Global Equity and Vanguard LifeStrategy 80% Equity retaining their respective positions in the top three. Swapping fourth and fifth places are Lindsell Train UK Equity and Vanguard LifeStrategy 60% Equity.
|Rank||Fund||IA sector||Change since July||1-year return (to 2 Sep)||3-year return|
|2||Lindsell Train Global Equity||Global||-||19.70%||84.20%|
|3||Vanguard LifeStrategy 80% Equity||Mixed Investment 40%-85% Shares||-||6.60%||31.10%|
|4||Lindsell Train UK Equity||UK all companies||1||14.30%||50.20%|
|5||Vanguard LifeStrategy 60% Equity||Mixed Investment 40%-85% Shares||-1||7.60%||25.20%|
|6||Vanguard US Equity Index||North America||2||8.70%||53.40%|
|7||Investec Global Gold||Specialist||New entry||73.20%||30.40%|
|8||AXA Framlington Global Technology||Global||-2||10.90%||98.70%|
|9||Vanguard LifeStrategy 100% Equity||Global||-||5.60%||37.20%|
|10||Vanguard LifeStrategy 20% Equity||Mixed investment 0%-35% Shares||New entry||9.90%||14.30%|