How to know what your all-in-one fund holds

Knowing what you’re buying is crucial when making any investment. Oftentimes the quickest way to find out what your fund is invested in is to scan the top 10 holdings, which for many funds will show you the top companies the fund invests in.

But if you invest in an all-in-one fund, like any of the AJ Bell fund range, this list might look a bit less clear. Instead of individual companies, it will show a list of ETFs (exchange traded funds) or tracker funds that might leave you feeling a bit stumped initially and require you to dig a bit deeper.

Regulation varies across global markets about how much funds have to disclose about their assets, but there is a general desire across the asset management industry to increase transparency and give investors more information to help them make more comprehensive investment decisions.

Funds available to retail investors will list its 10 biggest holdings on its factsheet, a key document anyone can access where you can find a plethora of other information like how much it costs, total returns and sometimes updates on the manager’s market views.

• Read: How to get the most out of a fund’s factsheet

AJ Bell wrote a guide on how to get the most out of a fund factsheet, and this can be used as a foundational step to your research.

But, as we mentioned before, sometimes that top 10 won’t be full of recognisable stocks like Nvidia or BP, or bonds. Instead, it’ll list other funds and even ETFs which doesn’t help you understand exactly what’s in there from the outset.

Taking two of the most widely held multi-asset funds among AJ Bell DIY investors, its own Adventurous fund and the Vanguard 80% Equity fund from its LifeStrategy range, both of their top 10s are purely ETFs and tracker funds.

Both ETFs and tracker funds are designed to replicate and mimic the makeup and performance of an underlying benchmark.

The AJ Bell Adventurous fund’s top holding is the SPDR S&P 500 ETF, while the Vanguard fund opts for the Vanguard FTSE Developed World Ex-UK Equity Index A Acc. Neither name gives a totally clear picture of what they’re invested in up top, so if you want to know more about the actual companies, you need to resume the factsheet checking process again, but this time, on the ETF or tracker fund.

Tracker funds will have a factsheet affiliated with them similar to an active fund’s, giving you a breakdown on the sectors and top assets within it.

Because tracker funds follow an index, you can also go and check out the indices website which will give you the full list of stocks.

For example, in the case of the AJ Bell fund, you’d find that the SPDR S&P 500 ETF is the oldest and largest of its ilk. It tracks the performance of the US S&P 500 index, which is the premier equity market for US public companies. By owning this, the AJ Bell fund is able to access the performance of a group of the world’s most prominent companies, such as Nvidia, Apple, and Amazon, increasing the overall diversification through a fairly simple product.

Having to move around to multiple sources to find this information may feel like a lot, but this is for when you want to get really granular and down into the details. You can get a solid read of what the initial fund you’re looking to hold does by looking at other factors, like the regional and sector allocations. All-in-one funds will break these down for you to give an overall picture of what the underlying funds hold.