June's 10 most-bought funds

One of our sister magazine Money Observer's Rated Funds, Fundsmith Equity, has once again taken the top position in the most-bought funds on the Interactive Investor platform.

The popular fund is managed by highly regarded investor Terry Smith and has over half of its assets in US equities. Three months ago it toppled fellow CF Woodford Equity Income and has remained the most-bought fund ever since.

Neil Woodford's eponymous open-ended fund, which had previously been leading the list most months since its launch in June 2014, took second place again in June. The UK equity income fund has returned 2.3% over three months to 4 July, and gained 3.4% over the last year.

Rebecca O'Keeffe, head of investment at Interactive Investor, says: "The outperformance of Fundsmith Equity in June confirmed its choice as a firm favourite of investors, who will have been delighted with the 11% June return achieved.

"The overseas bias of the fund, which holds over 60% of its assets in US equities, has significantly benefited from the fall in sterling, but the active management of the fund also allows its manager, Terry Smith, an ideal opportunity to take stock and sector bets, which have also helped boost performance."

Passive popularity

Passive funds have gained in popularity in June. The third place in the list was taken by HSBC FTSE 250 Index, which climbed four spots.

It was closely followed by Vanguard LifeStrategy 80% Equity, which focuses on North American equities, UK equities and European ex UK equities as well as global bonds.

Another three passive funds were represented in the top 10. Vanguard FTSE UK All Share climbed an impressive eight spots to sixth in June's list, possibly reflecting investors' interest in taking advantage of the post-Brexit rally last week.

Meanwhile Vanguard LifeStrategy 60% Equity climbed six spots to seventh in the list. In addition, HSBC FTSE All Share Index has gone down two places to ninth place.

Money Observer Rated Fund Lindsell Train Global Equity has dropped one place from May to be the fifth most-bought fund in June.

Managed by Michael Lindsell since its launch in March 2011, the fund has performed well, with returns of 6.3% over one month to 4 July and 12.5% over six months.

Axa Framlington Biotech has dropped two places from sixth in May to take the eighth spot in June's most-bought list.

Managed by Linden Thomson, the biotech fund has struggled over the last six months, losing 16.9% as the wider biotech sector took a hit following uncertainty around drug pricing in the US, some failed takeovers as well as unrealistic valuations.

It is worth noting that the specialist fund has nonetheless gained an astonishing 175.4% over the last five years.

In the wake of the Brexit vote and the uncertainty it has created, it does not come as a surprise that safe-haven gold fund BlackRock Gold & General has climbed eight places to take 10th spot in June. It returned 48.7% over the last three months.

O'Keeffe says: "Entering the Top 10 most-bought funds is Blackrock Gold & General, which jumped up the rankings and delivered incredible performance as investors sought out safe-haven assets in the wake of the referendum results.

"Whilst equity purchases are usually accompanied by a fall in the demand for the traditional risk-averse purchases of precious metals and the Yen, both types of asset class have risen strongly over the past two weeks, delivering good performance for investors."

This article was originally published by our sister magazineMoney Observer here.

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