December's 10 most-bought funds
6th January 2017 16:40
by Marina Gerner from interactive investor
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took the top position in the list of most-bought funds on Interactive Investor for the ninth consecutive month.
It is a Rated Fund on our sister website Money Observer and has been the most-bought fund ever since it toppled nine months ago. The fund has over half of its assets in US equities and is managed by highly regarded investor Terry Smith.
On the whole the names in the table of 10 most-bought funds for December remain unchanged from November. Neil Woodford's eponymous open-ended fund, which launched in June 2014, took second place. The UK equity income fund gained 4.9% over one month to 2 January and 6% over six months.
The fund remains hugely popular despite underperforming the Investment Association's UK equity income sector, which gained 9.7% over six months.
Shift in sentiment
That reflects a shift in sentiment in the face of expectations of greater opportunities for growth in 2017, away from so-called 'bond proxy' stocks - big, high-quality, dividend-paying companies - and towards cheaper and more cyclical holdings likely to do well in a more reflationary, growth-oriented environment.
Half of the most-bought funds in December were passive ones. The third place in the list was taken by , which focuses on North American equities, UK equities and European ex UK equities as well as global bonds.
, another Money Observer Rated Fund, was fourth on the list. Jointly managed by Michael Lindsell and Nick Train since its launch in March 2011, the fund returned 6.3% over six months to 2 January.
Like Fundsmith Equity it focuses mainly on defensive, high-quality stocks, which have become increasingly sought-after and expensive over recent years but have underperformed over the last few months as investors have refocused to some extent on growth opportunities.
It was closely followed by , which climbed three spots to take fifth place in December's list, while took sixth place.
was the seventh of the most-bought funds in December. It benefits from a global spread, as one third of its holdings are in US equities, about 13% in UK equities and 8% in German equities.
The eighth place in the top 10 was taken by , which has 62% in US equities and 10% in Japanese equities. The ninth place was taken by another tracker, , which gained 5.9% over one month.
The 10th position was taken by , which dropped four places; despite this fall, the fund gained 3% over the last month and is up an astonishing 114.5% over the last three years.
With this year's looming Brexit negotiations and potential political change across Europe, investors have been turning to emerging market funds, which enjoyed a new spurt of life in 2016, though there is continuing uncertainty as to what president-elect Donald Trump's protectionist policies will mean for some emerging economies.
In India specifically, new tax reforms are seen as a positive development for the economy.
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.