The top-selling investment funds of 2018
As we approach the end of the year, our experts have crunched the numbers to bring you the 10 most popular funds with Bestinvest clients in 2018. How many of your funds made the list? Please read the Important information below and make sure you understand the risks before investing.
Published on 12 Dec 20186 minute read
Written by Jason Hollands
1. Fundsmith Equity
Few people will be surprised to see Terry Smith taking the top spot for the third year in a row. His popular Fundsmith Equity fund has a concentrated portfolio of 20-30 companies, predominantly from the UK, US and Europe. Smith looks for companies that deliver high returns on capital at attractive valuations, and then holds for the long term.
2. IFSL Tilney Bestinvest Growth Portfolio
In second place is one of our Ready-made Portfolios. This fund is managed by our team of experts and aims to deliver growth by investing in a mix of shares, bonds, property, commodities and targeted absolute return funds.
3. Lindsell Train Global Equity
Lindsell Train co-founders Michael Lindsell and Nick Train take the bronze medal this year. This fund invests in durable, cash-generative businesses from across the globe. Many of these companies come from the food and alcohol industries – the three biggest holdings are Unilever, Diageo and Heineken.
4. IFSL Tilney Bestinvest Aggressive Growth Portfolio
This Ready-made Portfolio has also proved popular with our clients in 2018. It has an adventurous strategy and aims to grow your investment over the long term. A significant part of the portfolio is invested in shares, including those of smaller companies and from the emerging markets and Asia.
5. HSBC American Index
Coming in at fifth place, this fund aims to replicate the performance of the S&P 500 – an index of the 500 largest US companies. The fund offers investors a simple and low-cost way to invest in the US stock market, which has historically been notoriously difficult for active managers to beat.
6. Liontrust Special Situations
Run by experienced fund managers Anthony Cross and Julian Fosh, Liontrust Special Situations invests in UK equities with a bias towards small and medium-sized companies. Using Liontrust’s ‘Economic Advantage’ investment process, the duo looks for companies with competitive advantages that are difficult to replicate, such as intellectual property and strong distribution channels.
7. Stewart Investors Asia Pacific Leaders
Coming in at number seven for the year is Stewart Investors Asia Pacific Leaders, which predominantly invests in large-cap companies from the Asia Pacific region (excluding Japan). The fund is managed by David Gait, a veteran who has worked for the company since 1997. His investment style focuses on the preservation of clients’ money, and as a result he tends to outperform falling markets but lag when they are rising.
8. Threadneedle UK Equity Income
This fund aims to grow investors’ capital while providing a regular income. To achieve this, fund manager Richard Colwell invests mainly in large and medium-sized UK companies, including the likes of AstraZeneca and Royal Dutch Shell. Colwell has the backing of one of the largest UK equity teams in the industry, and uses a combination of macroeconomic research and fundamental stock analysis to find companies.
9. Fidelity Emerging Markets
This fund invests in large and medium-sized companies from the emerging markets. Backed by a team of analysts with an average of 17 years’ experience in the industry, fund manager Nick Price scrutinises balance sheets and focus on fundamentals to find high-quality companies. He also looks for businesses with strong market positions and competitive advantages, as they can deliver good earnings throughout the economic cycle.
10. Threadneedle European Select
In at number 10 is Threadneedle European Select, the only European fund on the list this year. Fund managers Dave Dudding and Mark Nichols look for companies with competitive advantages that can deliver strong sales and profit growth over the long term. Some of the biggest current holdings are Unilever, Adidas and L’Oreal.
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- 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.
- Targeted Absolute Return funds do not guarantee a positive return and you could get back less than you invested much like any other investment. Additionally, the underlying assets of these funds generally use complex hedging techniques through the use of derivative products.
- Smaller companies’ shares can be more volatile and less liquid than larger company shares, so smaller companies funds can carry more risk.
- 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’s value could either increase or decrease in response to changes in those exchange rates. These investments therefore carry more risk.
- Funds which invest in a specific sector may carry more risk than those spread across a number of different sectors. In particular, gold, commodity, technology and other similarly-focused funds can suffer as the underlying stocks can be more volatile and less liquid.
- 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.
- Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.
- The property market can be illiquid; consequently, there can be times when investors in property funds 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.