Equity  

Investors dived into equity funds in January 

Investors dived into equity funds in January 

Investors using Tilney’s online service favoured funds focused on equities in January, as the group revealed its 10 most popular investments in the first month of the year.

So far in 2017, equities have leapt to new heights, with the FTSE 100 embarking on a winning streak for 12 days in a row while the FTSE 250 has also reached a record high.

While the political uncertainty has kept markets on their toes, Jason Hollands, managing director of the Tilney Group, said volatility has actually been incredibly low.

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Two of Tilney's multi-asset offerings, the Growth and Aggressive Growth portfolios, made it to first and fourth place on the popular fund list, but it was largely equity-focused funds which came out as the winners last month.

Those using Tilney’s online investment service ploughed money into equity funds, with the £9.4bn Fundsmith Equity, which was the most popular vehicle last year, maintaining the top spot in January if you exclude Tilney's own offering.

Mr Hollands said: “City big gun Terry Smith has an invest-and-hold strategy focused on concentrated portfolio of 29 quality growth stocks from across developed markets." 

According to the Tilney boss, Mr Smith sums this strategy up as: “Buy shares in good companies; don’t overpay; do nothing.” 

The fund has a high weighting to consumer staples at 35 per cent, healthcare at 27 per cent, and technology at 24 per cent.

However, according to FE, Fundsmith has returned 37 per cent over the past year, underperforming the IA Global sector return of 42 per cent.

Taking the next spot, despite a relatively tough 2016, was Woodford's flagship £9.3bn Equity Income fund, managed by Neil Woodford.

Mr Hollands said: “While his flagship fund does dabble in riskier small growth businesses, it primarily focuses on resilient companies that are less affected by the global economic cycle and are more in charge of their own destiny.

“With a highly loyal fan base, we expect the planned launch of the new Woodford Income Focus fund in March to prove popular, although some of this may come at the expense of support for his existing Woodford Equity Income fund.”

The Woodford Equity Income has returned 15 per cent over the past year, lagging behind the IA  UK Equity Income sector return of 23 per cent, according to FE.

Despite the caution towards emerging markets and Asia at the moment, given President Trump’s views on raising import tariffs to protect American jobs, the Stewart Asia Pacific Leaders fund managed to make it to third place on the list.

The £9.6bn fund, managed by David Gait, focuses primarily on investing in large companies with sustainable cash flows and strong balance sheets. 

Its highest weighting remains India at 29 per cent, followed by Taiwan at 18 per cent, but it has negligible exposure to China where concerns persist about the level of debt.