• Advisers back a UK recovery with their fund choices
• Passives still proving popular in 2020
• Smith and Train are go-to fund managers for advisers and DIY investors alike
Laith Khalaf, financial analyst at AJ Bell:
“Financial advisers have backed the UK with the most popular funds they have recommended for clients this year. Clearly advisers are in a more contrarian mood than DIY investors, who have shown a marked preference for global funds, which have largely performed well in recent years. Six of the ten most popular funds selected by advisers on the AJ Bell Investcentre platform are UK focused, compared to just one of ten selected by DIY investors this year.
“The UK is a highly unloved regional market and has been for some considerable time, so advisers are really banking on a reversal of recent trends with this allocation call. The UK continues to be one of the best places for dividend income, but all of the most popular UK funds selected by advisers actually sit in the growth camp, which is a big vote of confidence in the prospects for the UK stock market. This may be a reflection of advisers taking a long term view that the UK is now attractively valued, after a year in which it has brought up the rear in performance compared to other major developed markets.
“One thing DIY investors and advisers have in common in their most popular fund picks this year is allocation to passive funds. Index trackers have been enjoying a secular growth story, largely irrespective of what else is going on in the funds market, thanks to their simple approach and low charges. But at the same time advisers and DIY investors are also plumping for the highly active approaches of fund managers Terry Smith and Nick Train.
“While some will no doubt sit on one side or the other in the active and passive debate, actually there’s nothing wrong, and quite a lot right, with using both active and passive funds in one portfolio. Passive funds help to diversify risk, and lower overall portfolio costs, while active funds in the portfolio offer the prospect of some outperformance over the long term.”
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Most popular adviser funds on AJ Bell Investcentre |
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Vanguard Lifestrategy funds |
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Fundsmith Equity |
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Lindsell Train UK Equity |
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Janus Henderson Strategic Bond |
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Vanguard FTSE UK All Share |
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Stewart Investors Asia Pacific Leaders |
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Liontrust Special Situations |
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JOHCM UK Dynamic |
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Ninety One UK Alpha |
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Vanguard FTSE UK Equity |
Source: AJ Bell Investcentre most bought funds between 01/01/20 and 04/12/20
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Most popular DIY investor funds on AJ Bell Youinvest |
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Fundsmith Equity |
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Vanguard Lifestrategy funds |
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Lindsell Train Global Equity |
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Baillie Gifford American |
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Polar Capital Global Technology |
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Fidelity Index World |
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Fidelity Global Special Situations |
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Baillie Gifford Positive Change |
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TB Evenlode Income |
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Baillie Gifford Global Discovery |
Source: AJ Bell Youinvest most purchased investments 01/01/20 - 04/12/20, excluding AJ Bell funds
