AJ Bell reports investors' favourite funds in April

AJ Bell reports investors' favourite funds in April

Terry Smith's Fundsmith Equity fund was the most bought investment on the AJ Bell Investcentre in April, with three US funds making it into the top 10.

American favourites among UK investors were the Schroder US Mid Cap, which came in the fifth position, Old Mutual North American Equity, which was the sixth most popular, and iShares North American Equity Index, which was in the seventh position.

Europe and Asia funds were more popular than those focused on the UK.

Article continues after advert

The Jupiter European was the second most bought, with the Stewart Investors Asia Pacific Leaders at third.

Ryan Hughes, head of active portfolios at AJ Bell, said the rankings reveal advisers are favouring overseas markets to the UK, "which, given the recent slowdown in UK GDP growth, is perhaps unsurprising", he said.

"Fundsmith Equity is a staple in many portfolios, offering exposure to high quality global businesses with a very strong performance track record. 

"Europe and Asia are also proving popular as advisers look to benefit from the strong growth opportunities these markets offer. 

"Perhaps surprisingly the US has three funds in the top ten best sellers, with the potential benefits of Trump’s tax reforms clearly offsetting any fears around rising interest rates and full valuations."

The results also put the Vanguard FTSE UK Equity Income Index in the top 10, at eighth most bought.

Liontrust Special Situations came in ninth position, and Lindsell Train UK Equity was in tenth position.

Alan Chan, director and chartered financial planner for London-based IFS Wealth & Pensions, said he thinks the popularity of US funds is partly explained by the impending Brexit situation, "which may affect portfolios with a heavy concentration in the UK". 

"Investors are looking for more global diversification through the US, Europe, Asia funds. 

"Also, until very recently, UK equities have lagged behind in terms of performance in the last few years. 

"The fact that there are still 3 UK funds in the top 10 reinforces the importance of having UK equities still within your portfolio and that global diversification is important in achieving long term growth and minimising volatility."