July's 10 most-bought funds

Fundsmith Equity has once again taken the top position in the most-bought funds on Interactive Investor.

Managed by the highly regarded investor Terry Smith, the popular fund is one of our sister website Money Observer's Rated Funds and has over half of its assets in US equities. Four months ago it toppled 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 July. The UK equity income fund has returned 6.9% over three months to 1 August, and gained 5.1% over the last year.

Money Observer Rated Fund Lindsell Train Global Equity has gone up two places from June to be the third most-bought fund in July.

Boost for fund managers

Jointly managed by Michael Lindsell and Nick Train since its launch in March 2011, the fund has performed well, with returns of 4.4% over one month to 1 August and 19.9% over six months.

Rebecca O'Keeffe, head of investment at Interactive Investor, says: '"The post-Brexit landscape and the consequent move in sterling against the dollar, alongside major stock and sector moves, have given active fund managers a much-needed boost.

"Fundsmith and Lindsell Train have delivered stellar performance based on their overseas holdings and active management, whereas Woodford is a renowned stock-picker - so it is no surprise at all to see these three funds at the top of the most-bought list."

Passives still popular

Passive funds continued to remain popular in July and are well represented in the top 10, with four funds featuring.

The fourth place in the list was taken by Vanguard LifeStrategy 80% Equity, which focuses on North American equities, UK equities and European ex UK equities as well as global bonds. It was closely followed by HSBC FTSE 250 Index, which dropped two spots.

The other two passive funds represented in the top 10 were Vanguard LifeStrategy 60% Equity, which dropped one spot to eight place, and Vanguard FTSE Developed World Ex UK Equity Index, up four spots to take ninth place in the list.

Meanwhile, Vanguard FTSE UK All Share went down by 12 places, possibly reflecting investors' waning interest in taking advantage of the post-Brexit rally last month. HSBC FTSE All Share Index has also gone down by six spots and dropped out of the top 10 in July.

Watch currency moves

Axa Framlington Biotech has gone up one place from eighth in June to take the seventh spot in July's most-bought list.

Managed by Linden Thomson the biotech fund has struggled over the last year, losing 14.6% 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 237.6% over the last five years.

In the wake of the uncertainty resulting from the Brexit vote and the anticipation surrounding US elections, it does not come as a surprise that safe-haven gold fund BlackRock Gold & General has climbed four places to take sixth spot in July.

It returned 8.8% over one month to 1 August and 116.6% over the last six months.

O'Keeffe adds in the coming months investors need to be wary of currency swings.

"Investors from here need to make sure they factor potential currency moves into their consideration set, alongside decisions such as passive versus active management and the global FTSE 100 versus the more domestically oriented FTSE 250," says O'Keeffe.

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.