UK investors favour US and Germany-focused funds, as well as global equities and emerging markets, according to new data.
Investment giant Fidelity International has released a list of last year’s bestselling funds on its UK ‘Personal Investing’ platform, with the £13.4bn Fundsmith Equity Fund coming out on top.
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Run by investment veteran Terry Smith, the fund returned 19.7 per cent to investors last year by investing primarily in US-based tech stocks such as Paypal and Microsoft. The second most popular fund – Rathbone Global Opportunities – returned 20.07 per cent last year by following a similar strategy , suggesting that UK investors favour well-established equity funds with an emphasis on growth stocks.
“The top-selling fund was Terry Smith’s Fundsmith Equity Fund, showing the appeal of both a well-known and trusted investor and a quality-focused, buy and hold investment approach that has continued to look appealing in an uncertain world,” said Tom Stevenson, investment director for Personal Investing at Fidelity International.
“Self-directed investors once again proved themselves to be the match of the professionals when it came to picking the winners. In particular, ongoing US market leadership rewarded investors in the Rathbone Global Opportunities Fund (which is overweight the American market).”
Income-focused funds were also popular in 2017, perhaps as a response to the low interest-rate environment which deprived many savers of steady returns. Fidelity’s Multi Asset Income Fund and the Fidelity Global Dividend Fund were listed in third and fourth place, respectively.
However, there were a few surprises in the top ten. The Lindsell Train Global Equity Fund – a boutique fund which invests in a concentrated pool of “exceptional” companies – ranked at number six on the list, while Fidelity’s own Emerging Markets Fund was the ninth most popular with UK investors last year. Baring’s German Growth Trust rounded out the top ten, as investors looked beyond the UK for double-digit returns.
“The synchronised market upturn benefited investors in Lindsell Train Global Equity, the Fidelity Index World Fund and Fidelity Global Special Situations,” said Stevenson. “The strong performance of the Baring German Growth Trust, as the European economy picked up momentum, was also spotted by canny investors. With emerging markets enjoying a stellar year, it was also a good year to be in Fidelity Emerging Markets.
“Looking into 2018, I expect investors to balance their investments between value funds that will benefit from an uptick in global growth and more defensive quality as worries mount that the long bull market may evolve into a more volatile environment.”
The top ten most popular funds of UK investors in 2017 are listed below:
Fundsmith Equity Fund
Rathbone Global Opportunities
Fidelity Multi Asset Income Fund
Fidelity Global Dividend Fund
Fidelity Index World Fund
Lindsell Train Global Equity Fund
Old Mutual North American Equity
Fidelity Global Special Situations Fund
Fidelity Emerging Markets Fund
Baring German Growth Trust