What funds have investors been buying this year?

World stock markets registered strong gains in the first nine months of the year. The US technology sector accounted for a substantial part of this, due to optimism over the rapid take-up of artificial intelligence (AI). Nvidia – the leading supplier of advanced AI chips to data centres – briefly surpassed Microsoft to become the world’s largest listed company.

Anticipation of lower interest rates and falling inflation also underpinned shares, despite volatile views about the likely timing and extent of rate changes. Overall, the US economy remained robust, even after two years of elevated borrowing costs. Despite this, America’s central bank cut its key Fed Funds Rate by a larger-than-expected 0.5% in September, to the range 4.75% to 5%.

The FTSE 100 reached a new record in April, just prior to the surprise announcement of a UK general election. Shares traded sideways in the months after that, however, partly as a result of caution ahead of an unveiling of the new government’s tax and spending plans.

Japan’s Nikkei 225 Index finally breached its 1989 historic peak in February, before scaling even greater heights during the summer. Gains were eventually capped by a rise in Japanese interest rates, counter to the global trend. China’s stock market mapped a volatile course, as investors weighed fundamental weakness in China’s economy against likely government measures to boost growth.

Funds at either end of the risk spectrum dominated the best sellers lists at Fidelity Personal Investing over the period. Funds with a heavy exposure to the US stock market proved popular. In particular, world index trackers and technology funds were mainstays. With UK interest rates staying close to a multi-year peak, money market funds were also close to the top.  

The same funds took the first five places for ISA and SIPP purchases. The Fidelity Index World Fund was the most popular of all, as world stock markets continued their almost relentless march forward. This fund tracks the MSCI World Index on a net total return basis with returns automatically converted back into sterling.

The Fidelity Cash Fund came in second. The Fund’s SONIA interest rate benchmark remained steady at 5.2% for most of the period before dipping to 4.95% on 1 August after the Bank of England cut its Bank Rate¹. SONIA is the rate that banks pay to borrow sterling overnight from other financial institutions.

Next was the first of two funds dedicated to the global technology sector. Like the preceding two funds, the Legal & General Global Technology Index Trust was a persistent favourite throughout the period. This fund tracks the FTSE World Technology Index and had 255 holdings at the end of September. The ten largest holdings – led by Apple, Microsoft and Nvidia – make up around 70% of the portfolio².

The actively managed Fidelity Global Technology Fund, in fourth, can take reduced positions in the market’s biggest stocks or miss them out altogether. Taiwan Semiconductor, the maker of high-end Nvidia AI chips whose strong quarterly results bolstered the tech sector in late October, currently accounts for around 6.2% of the portfolio. That was slightly ahead of Microsoft (6.1%) and Apple (4.5%). Sweden’s Ericsson, Texas Instruments and the US business software provider Workday also feature among the top 10 holdings.

The fifth most bought fund, the Fidelity Index US Fund, also has a high exposure to technology. This fund tracks the S&P 500 Index on a net total return basis – so inclusive of dividends. Once again, Apple, Microsoft and Nvidia are the largest holdings here.

The Jupiter India Fund was the six most bought fund for ISAs and tenth most popular for SIPPs. This fund has a highly selective investment approach, which has served it well over the longer term. Current large holdings include the tobacco manufacturer Godfrey Phillips India, Bharat Petroleum and State Bank of India.

The Indian stock market benefitted from both local and foreign buying over the period, boosted by a strong growth outlook and coincident economic difficulties in China. Shares have fallen back in October, however, amid valuation concerns and as a result of some foreign investors turning their attentions to China’s economic stimulus measures. The IMF has now upgraded its 2024 economic growth forecast for India to 7.0%, from 6.8% at the time of its April update³.   

In contrast, the Royal London Short Term Money Market Fund was the sixth best selling fund for SIPPs. Like the Fidelity Cash Fund, this fund aims to outperform the Bank of England’s SONIA rate. At the end of September, around 84% of the fund was invested in cash and cash equivalents, with the remainder in Treasury bills, short-dated gilts and covered bonds⁴.  

Actively managed, worldwide funds dominated the lower reaches of the table for ISAs. The Fidelity Global Dividend Fund, Rathbone Global Opportunities Fund and Fidelity Global Special Situations Fund were in seventh, eighth and tenth place respectively.

The Fidelity Global Dividend Fund aims for a dividend based total return, with capital preservation the top priority. The fund is weighted towards robust companies in sectors such as consumer staples and pharmaceuticals, as well as industrials and financial services companies. Europe accounts for the fund’s largest exposure at present.

• Watch Dan Roberts, portfolio manager of the Fidelity Global Dividend Fund, share his case for global investing at our Wealth Investor Forum in June. 

The Rathbone Global Opportunities Fund targets a relatively small number of global companies that are growing quickly and shaking up their industry groups. The fund currently holds 53 stocks and has Nvidia, Costco and Microsoft as its top holdings. Amphenol – a US supplier of electronic and fibre cables and connectors that entered the portfolio in April – is now in fourth place⁵.  

The Fidelity Global Special Situations Fund is also built from the ground up, with a view to producing superior returns over the longer term. Current large holdings that aren’t US tech businesses include: Samsung Electronics, UnitedHealth Group and the US renewables company NextEra Energy.

Rounding out the table for ISAs was the Legal & General Global Equity Index Fund in ninth place. This fund tracks the FTSE World Index.  

The Legal & General Global Equity Index Fund and Fidelity Global Dividend Fund also found places among the top-10 funds for SIPP purchases, along with the only fund diversified by asset class to make these lists.   

The Fidelity Multi Asset Allocator Growth Fund invests in a combination of shares and bonds, with shares currently accounting for just under 60% of the portfolio. This fund aims to increase in value over a period of five years or more and allocates at least 70% to index tracking funds. 

Top 10 best-selling ISA funds on Fidelity Personal Investing in 2024

1. Fidelity Index World Fund
2. Fidelity Cash Fund
3. Legal & General Global Technology Index Trust
4. Fidelity Global Technology Fund
5. Fidelity Index US Fund
6. Jupiter India Fund
7. Fidelity Global Dividend Fund
8. Rathbone Global Opportunities Fund
9. Legal & General Global Equity Index Fund
10. Fidelity Global Special Situations Fund

Top 10 best-selling SIPP funds on Fidelity Personal Investing in 2024

1. Fidelity Index World Fund
2. Fidelity Cash Fund
3. Legal & General Global Technology Index Trust
4. Fidelity Global Technology Fund
5. Fidelity Index US Fund
6. Royal London Short Term Money Market Fund
7. Legal & General Global Equity Index Fund
8. Fidelity Global Dividend Fund
9. Fidelity Multi Asset Allocator Growth Fund
10. Jupiter India Fund

Source: Fidelity International. Gross ISA and SIPP sales from 1.1.24 to 30.9.24 for Personal Investors only. 

Sources

¹ Bank of England, 29.10.24
² LGIM, 30.9.24
³ IMF, October 2024
⁴ RLAM, 30.9.24
⁵ Rathbones, 30.9.24 

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Before investing into a fund, please read the relevant key information document which contains important information about the fund. Eligibility to invest in a SIPP or ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. Withdrawals from a SIPP will not normally be possible until you reach age 55 (57 from 2028). Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment.  If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.