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The top-selling investment funds of 2017

In this article we look at the 15 most popular investment funds with Bestinvest clients in 2017. There are no surprises at the top of the table, but who else makes the cut?

Jason Hollands Jason Hollands
13 December 2017

A focus on equities

The funds favoured by Bestinvest clients during 2017 – excluding our own multi-asset portfolios – were wholly or predominantly dominated by equities. There was not a single bond fund, targeted absolute return fund or property fund in sight.

Notably three passive-based investment funds made it into the top 10 choices, reflecting the growth in demand for low-cost choices that track general market movements. But overall, the table was still dominated by actively managed funds run by well-known managers with strong long-term track records.

Terry Smith comes out on top

Terry Smith’s Fundsmith Equity fund was the clear winner, taking the top spot for the second year running. The fund led the top-selling table in every single month across 2017, a position it has held for more than 20 months. Smith has certainly developed a considerable fan club of investors who like his no nonsense buy-and-hold approach, and the fact that he doesn’t sit on the fence with his views.

Earlier in 2017, some were calling time on the types of ‘quality growth’ companies that Smith backs, instead anticipating a resurgence in the fortunes of value stocks and cyclical businesses on the back of the reflation of the global economy. But the year turned out to be another strong one for managers with this style bias, and this has been yet another period of top performance for the Fundsmith Equity fund.

Neil Woodford takes the silver medal

In second place this year was the Woodford Equity Income fund, managed by heavyweight manager Neil Woodford. This comes despite the fund slipping down the monthly rankings as the year progressed.

2017 has shaped up to be an annus horribilis for Woodford, with some high profile stock blow ups and a run of severe underperformance which has pushed this fund – the largest in the IA UK Equity Income sector – right to the bottom of the performance tables.

Woodford will surely be hoping for a turnaround in 2018 and is taking a contrarian view that is much more upbeat about the UK domestic economy than consensus opinion. He has also been warning about an overvaluation “bubble” in global stock markets centred on companies with dependable growth characteristics. These are the sorts of companies favoured by Terry Smith and Nick Train, manager of the Lindsell Train Global Growth fund, another popular choice. Time will tell who is right – it will be a fascinating showdown.

The top 15

The 15 most popular funds with Bestinvest clients in 2017 were:

  1. Fundsmith Equity
  2. CF Woodford Equity Income
  3. Stewart Investors Asia Pacific Leaders
  4. HSBC American Index
  5. Liontrust Special Situations
  6. Threadneedle European Select
  7. Lindsell Train Global Equity
  8. Threadneedle UK Equity Income
  9. Vanguard LifeStrategy 80%
  10. Vanguard LifeStrategy 100%
  11. Jupiter India
  12. Axa Framlington UK Select Opportunities
  13. Artemis Global Income
  14. Fidelity Emerging Markets
  15. Baring Europe Select

Important information

We aim to provide investors with information to help them make their own investment decisions although this should not be construed as advice or an investment recommendation. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.

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

Underlying investments in emerging markets are generally less well-regulated than the UK. There is an increased chance of political and economic instability with less reliable custody, dealing and settlement arrangements. The market(s) can be less liquid. If a fund investing in markets is affected by currency exchange rates, the investment could both increase or decrease. These investments therefore carry more risk.

Smaller companies shares can be more volatile and less liquid than larger company shares, so smaller companies funds can carry more risk. The property market can be illiquid; consequently, there can be times when investors will be unable to sell their holdings. Property valuations are subjective and a matter of judgement.

Tracker funds track the performance of a financial index and as such their value can go down as well as up, much like shares, and you can get back less than you originally invested. Some are more complex so you should ensure you read the documentation provided to ensure you fully understand the risks.