The CF Woodford Equity Income fund has once again landed the number one spot in The Share Centre’s top traded funds list for December.
Andy Parsons, head of investment research at The Share Centre, said the popularity of the Woodford fund “continues to demonstrate that it is a solid investment choice among our investors”.
Launched back in June 2014, the fund offers a portfolio comprised of blue chip companies, as well as a number of young businesses.
In second position, and retaining its place within the top three, is the Fundsmith Equity fund. The fund invests in global equities, generally being between 20-30 stocks, and is managed by Fundsmith founder, Terry Smith.
“The underlying portfolio clearly demonstrates the manager’s conviction in the highly concentrated portfolio of global names in which he invests,” said Mr Parsons.
Retaining its position within the top 10, but moving up three places from November, is the Old Mutual UK Mid-Cap fund.
The fund seeks to provide capital growth from investing primarily in a portfolio of medium-sized UK companies, serving as an investment opportunity for those seeking mid-cap exposure.
The highest new entry this month, and in fourth position, is the Schroder Asian Income fund. Despite its ‘Asia’ title, the fund can invest across the Asia Pacific region and currently has around 20 per cent exposure to Australia.
According to Mr Parsons, this fund is best suited for those investors who are prepared to diversify their income seeking opportunities away from the UK, and who also believe the region offers more than simply the growth potential seen in the past.
The Polar Capital Healthcare Opportunities fund is the first of two sector specific investments within the top 10.
“With advances in medical and healthcare technology continuing at a rapid pace, the fund will provide investors with not only exposure to the sector, but also significant geographical exposure to the US given the dominance of this market,” Mr Parsons said.
The MFM Slater Growth fund, which sits in sixth place, seeks long-term capital growth, principally through investment in UK Companies.
In second place is the CF Miton UK Value Opportunities fund, which is managed by George Godber and Georgina Hamilton, and aims to identify UK companies which they believe are trading at a significant discount to their intrinsic value, using a bottom-up stock selection policy.
The AXA Framlington Biotech fund has slid down to eighth position this month from second place in November.
The fund suits those investors seeking specific sector exposure, where the underlying holdings are invested in equity securities of companies in the biotechnology, genomics and medical sectors worldwide.
The fund is approximately 85 per cent invested in US equities, with top holdings including Biogen, Celgene Corp and Gilead Sciences.
December saw the reappearance of index tracker funds, with the L&G UK Index fund - which seeks to replicate the performance of the FTSE All-Share index - appearing in ninth place.
Propping up the top ten this month, and the last of the new entrants, is the Jupiter European fund.
Launched in 1987, the portfolio is run on a very concentrated, high conviction basis, with the fund generally holding between 30 to 40 stocks.
Dan Farrow, director of SBN Wealth Management, said retail funds often adhere to a self-fulfilling prophecy.
“If a fund has had a good run of performance and has appeared at the top of their sector, then retail investors tend to buy it. People just look at those tables and think that fund manager must be good, and so will buy that fund.
“All of the funds in the list have got traits if being top performers, so I wouldn’t say there is any science behind them being top trading funds, other than historic performance, which could be really dangerous. It’s an instinctive thing to do for retail investors, but it’s a dangerous strategy.”
Mr Farrow said his clients have enquired after these funds, but that his model - which overlays actively managed funds with 60 to 70 per cent passive allocation - does not use any of the top trading funds.
“I was surprised the Standard Life UK Equity Unconstrained and the UK Equity Income Unconstrained funds were not included in the list, because they have been real top performers. But that is probably a function of Standard Life not advertising in the Sunday Money supplements.
“Any funds that have done really well often get a load of PR. If you did an analysis of the Sunday press, you would see adverts for the majority of those funds in the last six months.”
Mr Farrow suggested retail investors rely heavily on these lists, perhaps because they feel they don’t have control or have the knowledge required to understand something so intangible.
Last month, Mr Parsons shared his views on which funds could do well in 2016.
katherine.denham@ft.com
