February's 10 most-bought funds

February was a month of extreme volatility, in which the FTSE 100 index swung over 12% from a low of 5500 to a peak of almost 6200, and it seems the upward momentum of the past three weeks has tempted many investors towards index trackers.

Neil Woodford's first eponymous open-ended fund, CF Woodford Equity Income, was toppled from its top position in the most-bought funds onthe Interactive Investor platform in February, having held on the top spot since its launch in June 2014.

The top spot has now been taken by Fundsmith Equity, one of our sister magazine Money Observer's Rated Funds, which has over half of its assets in US equities. Managed by contrarian investor Terry Smith, the global equity fund has returned 15.3% over one year and 59.9% over three years to 2 March.

Passive popularity

The popularity of passive funds has grown among Interactive Investor users. This is the first time the top 10 most-bought list has been dominated by trackers since recent volatility began.

Below the Fundsmith and Woodford funds, the next five places were all taken by passive index tracking funds from Vanguard.

The most popular was Vanguard LifeStrategy 80% Equity, which went up one place from fourth in January to third most-bought fund in February. The tracker focuses on North American equities, UK equities and European ex UK equities as well as global bonds.

Further, Vanguard LifeStrategy 100% Equity went up two places from fifth to fourth place, Vanguard FTSE UK All Share Index remained in fifth spot, Vanguard FTSE Developed World ex UK Equity Index climbed four places to be the sixth most-bought fund in February, and Vanguard LifeStrategy 60% Equity went up four places to take seventh spot.

In addition, the passive fund HSBC FTSE 250 Index remained in the top 10, even though it dropped two places from seventh to ninth place in February's most-bought funds. This means that there were six passive funds in the top 10, up from five in January.

Gold popular as safe haven

BlackRock Gold & General climbed 11 spots from 19th in January to be the eighth most-bought fund in February. This is probably not surprising given the market volatility in the beginning of 2016, which has motivated investors to seek safety in gold.

The fund has gained 38% in the past three months. Co-managed by Evy Hambro and Tom Holl, it invests in shares of companies which derive a significant proportion of their income from gold mining and precious metals. Almost half of the fund's assets are in Canada, and about one fifth is in the US.

City Financial Absolute Equity is a returning name in February's most-bought fund list. It was the 10th most-bought fund in September 2015 but has not graced the top 10 again until now.

The fund is managed by David Crawford, who takes a value-based approach. It is managed against a cash benchmark, reflecting the aim to deliver a positive return in all stockmarket conditions over rolling 36-month periods.

In the meantime, Axa Framlington Biotech has dropped from third place in January to the 12th slot in February. Money Observer Rated Fund Lindsell Train Global Equity dropped from eighth place in January to 11th place, and another Rated Fund, Artemis Global Income, dropped from ninth to 18th place.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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.