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Where did our clients invest in July 2015?

Jason Hollands, Managing Director at Tilney Bestinvest comments on the funds that proved most popular with clients using Tilney Bestinvest’s Online Investment Service in July.

Jason Hollands
18 August 2015
CF Woodford Equity Income
“The Woodford Equity Income fund celebrated its first birthday in June and what a happy birthday it proved to be for investors since launch: in the 12-months to the end of July it finished up at the top of the UK Equity Income sector and once again proved the most popular fund for new investment by our Online Investment Service clients. Investing mainly in large-cap UK equities with some mid-cap and overseas exposure, manager Neil Woodford continues to be a big fan of tobacco giants Imperial Tobacco, British American Tobacco and Reynolds American and healthcare firms AstraZeneca and GlaxoSmithKline, all of which are top ten holdings.”
HSBC American Index
“Many investors choose index trackers for accessing the US market, as the S&P 500 Index is notoriously difficult to beat. This fund has low-cost on-going charges of just 0.18%, minimising the drag impact of costs.”
Tilney Bestinvest Growth Portfolio
“Tilney Bestinvest’s range of Multi-Asset Portfolios typically hold around 20 funds, each one having been hand-picked by our research team to reflect our strongest investment ideas. The Growth fund is designed to deliver capital growth over the longer term, and to that end is 60% invested in equities with a bias towards the UK.”
AXA Framlington Biotech
“Manager Linden Johnson marked her third year in charge of the AXA Framlington Biotech fund last month, and has cause to celebrate with the fund outperforming its benchmark over the past year. Investing principally in biotechnology companies such as Gilead Sciences Inc. and Celgene Corp, the bulk of the fund’s portfolio consists of US stocks, reflecting the location of much of the biotech industry. This is one of the few authorised funds investing in this specialist and high risk sector.”
Tilney Bestinvest Income & Growth Portfolio
“The second Tilney Bestinvest Multi Asset portfolio to appear on July’s best-selling list is Income & Growth, which is designed to modestly grow investments while providing a regular source of income. A significant proportion of the fund is invested into government, corporate and high yield bonds. This portfolio may appeal to investors with a medium tolerance to risk.”
Threadneedle European Select Fund
“This fund has consistently featured in our list of most popular funds this year, reflecting renewed interest in European equities since the introduction of the European Central Bank’s Quantitative Easing stimulus programme, and its status as our top-rated funds. Manager Dave Dudding focuses on high-quality global growth companies with relatively stable earnings, and he has demonstrated his ability to pick stocks and deliver impressive returns for investors.

“Consumer goods (24.6% of the fund) and healthcare (23.7%) are the two major themes within the portfolio. Chemical and pharmaceutical company Bayer Ag and Danish multinational pharmaceutical company Novo-Nordisk are held alongside household names like cosmetics brand L’Oreal and British-Dutch consumer giant Unilever, whose most popular products include Ben & Jerry’s ice cream and Lynx deodorants."

HSBC FTSE 250 Index
“July saw the debut appearance in 2015 of this FTSE 250 tracker on our monthly list of most popular funds. HSBC’s passive funds team invest in the physical equities and fully replicates the index with low annual charges. Well-known insurance group Direct Line and sugar manufacturer Tate & Lyle are two companies the fund holds.”
Threadneedle UK Equity Income
“Threadneedle duo Leigh Harrison and Richard Colwell invest predominantly in large and mid-cap UK equities, and take a pragmatic approach in contrast to the strong style biases sometimes seen in the UK equity income sector. The fund is managed on a total return basis, with stocks held both for their dividend and growth potential. Top holdings in the fund include Astrazeneca, Imperial Tobacco Group and GlaxoSmithKline.”
Standard Life Global Absolute Return Strategies
“The latest industry data suggests record inflows into targeted absolute return funds, a sign of growing investor cautiousness. At over £25 billion in size, Global Absolute Return Strategies (‘GARS’) has been a huge success story for Standard Life Investments and a fund we have backed for some time. The fund is an umbrella for around 30 underlying individual investment strategies, utilising equities, bonds and currencies with the overall goal of aiming to generate positive returns over the medium term regardless of market conditions with low volatility, although there are no guarentees. Despite the recent emergence of some challengers with not dissimilar approaches, GARS continues to enjoy strong support from our clients.”
First State Asia Pacific Leaders
“Despite a volatile period for Asian markets, as Chinese economic growth has slowed down, our top-rated Asia ex Japan fund has continued to prove a popular choice. Veteran fund manager Angus Tulloch employs a fairly conservative “bottom-up” investment approach to the First State Asia Pacific Leaders fund, targeting shareholder friendly companies with strong balance sheets. This style has led the fund to outperform its benchmark over the last 10 years, and it has performed particularly strongly in falling markets.

The fund is currently significantly overweight India (24.4% of the portfolio) while very underweight China (2.4%).”

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance.

Funds may carry different levels of risk depending on the industry sector(s) in which they invest. You should ensure that you understand the nature of any fund before you invest in it.

Funds which invest in specific sectors may carry more risk than those spread across a number of different sectors. In particular, gold, technology and other focused funds can suffer as the underlying stocks can be more volatile and less liquid.

Targeted Absolute Return funds do not guarantee a positive return and you could get back less than you invested, as with any other investment. Additionally, the underlying assets of these funds generally use complex hedging techniques through the use of derivative products, which can carry additional risks which may not be immediately apparent.

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.