Fundsmith Equity has exited interactive investor’s monthly most sold funds list for the first time since the platform began tracking the data in 2018.
The £24bn strategy has lagged the IA Global sector average over one, three, and five years, according to FE fundinfo data, though for longer-term investors it has outperformed the global market comfortably since launch in 2010.
Passive funds continued to dominate fund sales, with half of the top 10 made up by Vanguard offerings, while the only active funds to make the list were Jupiter India and Royal London Short Term Money Market. The L&G Global Technology Index Trust retained its place as the most sold fund ahead of Vanguard LifeStrategy 80% Equity.
Kyle Caldwell, funds and investment education editor at interactive investor, said that Fundsmith has had an “incredible run” by featuring in every ii buylist until August.
“Manager Terry Smith, like other professional investors, is continuing to face into the headwind of global stock market returns being heavily influenced by a small number of US technology companies.
“Many investors are positioning themselves for technology shares to continue their fine form. L&G Technology Index retains its place as the most-bought fund. It has large positions, just over 40% of the fund, in Apple, Microsoft and Nvidia. Therefore, holding this fund could spell trouble for investors who are overexposed to technology should there be a sharp correction.”
See also: Fairview’s Yearsley: August yields ‘mixed bag’ for fund trends
In terms of direct equities, investors continued to back Nvidia despite a volatile month for the US tech giant. The firm’s share price fell immediately after its quarterly update despite beating expectations, though the stock ended the month up 11%.
Scottish Mortgage was the most bought investment trust, ahead of Greencoat UK Wind and JP Morgan Global Growth & Income.
Richard Hunter, head of markets at ii, said the market correction at the beginning of August was used as a buying opportunity.
“A similar opportunity saw Amazon, another of the ‘magnificent seven’, in investors’ sights and the stock entered the top 10 most bought. The share price rise has been far less spectacular than that of Nvidia, but Amazon nonetheless rose by 6% in August and are up by 19% this year.
“In the UK, the usual suspects were seen in abundance. Rolls-Royce remains well regarded by investors, adding another 7% in the month to now register a gain of 66% so far this year, while there was also a strong presence of the perennial income-generating stocks.
“Legal & General, who also reported numbers in the month, currently has a dividend yield of 9.2%, and was joined by the likes of BP (5.3%), Lloyds Banking (5%), HSBC (7%, and 9.4% including special dividends) and Rio Tinto (7%).”
