Which were the most popular funds with our clients in April?

We are now into over a month into the new tax year and the early-bird investors have already begun topping up their Individual Savings Account’s and Self-Invested Personal Pensions with their new annual allowances.

Jason Hollands, Managing Director at Tilney Bestinvest, looks at the top ten most popular funds with self-directed clients using the Bestinvest Online Investment Service in April and finds a strong preference for long experienced fund managers over up-and-coming rising stars.*

At a glance: The most popular funds selected by clients using the Bestinvest Online Investment Service in April 2016:

Hollands’ comments: “The best-selling fund throughout the 2016 ISA season, Woodford Equity Income is showing no signs of losing its popularity with investors despite a tougher quarter for relative performance as commodity stocks bounced back. Neil Woodford believes this commodity rally is unsustainable and will prove short-lived and is sticking with dependable growth companies. Tobacco stocks Imperial Brands and Reynolds American, which the fund has big holdings in and Woodford has backed for many years, also had a tough month but he remains a fan of their exceptional ability to generate cash for shareholders.

“City maverick and prominent supporter of Brexit Terry Smith has continued to build his fan base. Investors piled £604million into his Fundsmith Equity fund over the first quarter of 2016, attracted by his simple ‘no nonsense’ investment process. The fund invests in quality growth companies on a global basis, and currently has 59.5% exposure to US companies and 24.2% to the UK. Top contributions in April came from medical technology manufacturer C.R. Bard and multinational financial services corporation Visa, while Microsoft and Unilever made up some of the top detractors.

“In third slot was the Tilney Bestinvest Growth portfolio. Around two-thirds of the portfolio is invested in equities, including exposure to smaller companies, emerging markets and Asia. The remainder of the fund is diversified across bonds, commercial property and other areas to reduce stock market risk. There are 30 funds and ETFs in the portfolio with examples being JO Hambro CM UK Opportunities, Artemis European Opportunities, Marshall Wace TOPS and ETF Securities Physical Gold.”

“Consistently appearing on our list of most popular funds the Stewart Investors Asia Pacific Leaders fund has a stellar long-term record (beating its Investment Association Asia Pacific ex. Japan benchmark by 121% over 10 years). It has a very large holding in India compared to the index allocation (23.9%, compared to 7.4%) which is currently a relative bright spot in the region, and tiny exposure to China (1.6%, compared to 21.9%) where many market watchers are concerned about the vast build-up of debt.

“The Tilney Bestinvest Aggressive Growth Portfolio takes a more adventurous investment approach than the Growth portfolio, with a larger exposure to shares in small companies and overseas companies. It is also designed for investors with a high tolerance for risk and a long investment time horizon.

“Threadneedle European Select manager Dave Dudding is known for his defensive style and true-to-form he recently sold his fund’s holding in Eurotunnel, owing to risks posed by the twin possibilities of Brexit and further terrorist attacks within Europe. Going forward, Dudding will be keeping a wary eye upon the ongoing political uncertainty in Spain, still without a government five months after last year’s General Election, but will be encouraged that many European companies away from the financial sector have so-far retained strong balance sheets and cash flows.

“Earlier this month Columbia Threadneedle announced that Richard Colwell, manager of the Threadneedle UK Equity Income fund, would be replacing retiring industry veteran Leigh Harrison as Head of UK Equities at the firm. There’s no need for investors to fear however, as the Colwell will remain in charge of the £3.2bn UK Equity Income fund. Large holdings include tobacco giant Imperial Brands, healthcare groups AstraZeneca and GlaxoSmithKline and WM Morrison Supermarkets.

“Co-managers Anthony Cross and Julian Fosh have managed to keep the Liontrust Special Situations fund producing some of the highest returns in the Investment Association UK All Companies sector during a period of increased volatility. The fund invests in companies both large, medium sized and small with holdings including consumer giants such as Diageo, the manufacturer behind globally popular alcoholic drinks such as Smirnoff vodka and Guinness stout and EMIS Group, a provider of software and IT to the NHS.

“Investment guru Warren Buffett used the recent annual meeting of his multinational holding company Berkshire Hathaway, attended by an incredible 35,000 people, to repeat once again his belief that investors should use cheap tracker funds for the best value long-term returns. The HSBC American Index fund follows the S&P 500 index, notoriously hard for active managers to beat, and has a very low ongoing charges figure of 0.08%.

“AXA Framlington UK Select Opportunities is managed by one of the most experienced fund managers within the UK All Companies sector, Nigel Thomas. His view that current uncertainties in the UK will stunt growth has pushed him towards companies that convert a large proportion of their profits into cash to continue paying dividends, a harder task than before seeing as firms such as Anglo American, Rolls Royce and J. Sainsbury’s have all recently announced the cutting of annual dividends. One such holding is ITV, a firm favourite of Thomas’ that accounts for 5% of the fund. He believes that the ever-growing amount that major brands spend on TV advertising proves fears about the death of free-to-air TV are “surely some sort of nonsense”.”

-ENDS-

*Most popular funds based on the total number of trades executed by investors using the Bestinvest Online Investment Service

Important Information:

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This press release does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance.

Different funds may carry varying levels of risk depending on the geographical region and industry sector(s) in which they invest. You should make yourself aware of these specific risks prior to investing.

Due to their nature, specialist funds can be subject to specific sector risks. Investors should ensure they read all relevant information in order to understand the nature of such investments and the specific risks involved.

Press contacts:

Jason Hollands
0207 189 9919 / 07768 661382
jason.hollands@tilneybestinvest.co.uk

Gillian Kyle
0203 818 6846 / 07989 650 604
gillian.kyle@tilneybestinvest.co.uk