The top 10 most popular investment funds – January 2018

Money Observer Rated Fund Fundsmith Equity once again retained its top position in our most-bought fund list, among users of our sister website Interactive Investor for the month of January.

Managed by highly regarded investor Terry Smith, this fund has over half of its assets in US equities such as Microsoft and PayPal. Until recently the fund was vying for top spot together with Neil Woodford's eponymous fund, but Woodford has now completely dropped out of our most-bought list after seeing its performance slump over the past two years. 

Baillie Gifford Greater China came was second in the popularity stakes, rising by three spots. After facing fears of a hard landing, the Chinese economy remained resilient last year, and the country’s GDP is expected to grow by some 6 per cent this year. 

At last year’s Communist party’s national congress in October, President Xi Jinping consolidated his power, and investor sentiment turned positive. But it’s worth remembering that as China transforms its economy, it continues to face many challenges: from environmental pollution to a lack of social services for its growing urban population.

In third place in our table is Legg Mason IF Japan Equity. Managed by Tokyo-based Hideo Shiozumi, the fund has 27 per cent of its holdings in healthcare and 26 per cent in industrials. It returned 30 per cent over one year and an eye-catching 144 per cent over three years. 

Japan was an investor’s favourite last year, and valuations continue to look cheap compared to the developed markets of the US and UK. Investor optimism has also been boosted by Japan's low unemployment rate, and the fact that GDP has expanded for six straight quarters - the longest sustained bout of growth since before the global financial crisis. 

Money Observer Rated Fund Lindsell Train Global Equity sits in fourth place in our list. Jointly managed by Michael Lindsell and Nick Train, the fund returned 3.9 per cent over six months and 21.4 per cent over one year.

Jupiter India is in fifth spot. The fund shed 9.5 per cent over the last six months but gained 38.8 per cent over the last three years. India is one of the world’s fastest growing economies driven by urbanisation and its young economy. 

Passive tracker Vanguard LifeStrategy 80% Equity dropped three places and came sixth in January – it focuses on North American equities, UK equities and European ex UK equities as well as global bonds. 

-Warren Buffett: investors should stick to low-cost tracker funds

Henderson Global Technology fell by two spots to be seventh on the list. With 80 per cent of its holdings in the US, where most technological innovation comes from, the fund has holdings including Facebook, Microsoft, Alphabet and Apple, which have been the main drivers of US growth last year. It returned 21 per cent over one year, and 76.4 per cent over three years.

Another China fund, Henderson China Opportunities, is in eighth spot. This fund has 15.3 per cent of its holdings in banks, 14.1 per cent in technology and 11 per cent in retail. It returned 33.8 over one year, and 74.8 over three years.

The ninth place was taken by Vanguard LifeStrategy 100% Equity, the second passive fund in the list. The tracker returned 7 per cent over one year and 38 per cent over three years. There were only two trackers funds in the top ten in January, as investors favoured active funds instead.

Baillie Gifford Japanese Smaller Companies entered remained unchanged on the tenth spot, once again illustrating that investors feel positive about the prospects in Japan, as Prime Minister Shinzo Abe continues to drive through structural change. 

Artemis Global Income, Marlborough UK Micro Cap Growth and Vanguard LifeStrategy 60% Equity dropped out of the top ten list in January.

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