The Schroder US Mid Cap and Old Mutual North American Equity funds and iShares North American Equity index all featured in the most-sold funds over the month, according to AJ Bell.
AJ Bell head of fund selection Ryan Hughes said potential benefits of Trump’s tax reforms appear to have offset fears around rising interest rates and full valuations.
Hughes said corporates are using savings from tax cuts to fund share buybacks and engage in M&A.
“Whether that’s what investors want to see is another matter. In the US market, buybacks are generally favoured by management above dividends. In the UK, you’d be far more likely to see an aggressive dividend raising policy,” he said.
Quilter multi-asset manager Sacha Chorley said he would like to see companies invest in capital expenditure (capex). “It’s something that a lot of those companies need,” he said.
“Buybacks are fine for shareholders. But to increase the earnings growth potential of any business you need to need to invest in it. We haven’t seen meaningful capex in the last couple of years,” Chorley said.
Apple’s buyback bonanza
Technology and financials were the sectors most likely to benefit from the tax reforms, Hughes said.
Apple announced on Wednesday it would buy back $100bn and raise its dividend 16% as it repatriates $250bn of overseas cash.
“That’s materially changed that business into something now that might be reasonably attractive for income seekers. It’s a company that’s likely to pay a growing dividend,” Hughes said.
Chorley added industrials were likely to benefit from the tax reform too.
Fundsmith still on top
Beyond the US, advisers continue to favour Fundsmith Equity, which was their top fund pick for April, followed by Jupiter European and Stewart Investors Asia Pacific Leaders, according to AJ Bell.
The latter was booted from the FE Invest preferred funds list this week, despite strong performance, due to capacity concerns.
Despite soaring duration in its fixed income allocation, Vanguard Lifestrategy 60% Equity remains a favourite with advisers, as does the passive giant’s FTSE UK Equity Income Index.
Liontrust Special Situations and Lindsell Train UK Equity rounded out the top 10.
April’s 10 most purchased funds
| 1 | Fundsmith Equity |
| 2 | Jupiter European |
| 3 | Stewart Investors Asia Pacific Leaders |
| 4 | Vanguard Lifestrategy 60% Equity |
| 5 | Schroder US Mid Cap |
| 6 | Old Mutual North American Equity |
| 7 | iShares North American Equity Index |
| 8 | Vanguard FTSE UK Equity Income Index |
| 9 | Liontrust Special Situations |
| 10 | Lindsell Train UK Equity |
