What's hot in the investment fashion parade?

A quick update this week – just back from an amazing week in a small sailing dinghy navigating Force 6 winds. I feel like I’ve spent a week in some military training exercise, but it was fun (mostly!).

Today we publish the best-selling fund, ETF and investment trusts lists across all major platforms in July. So what’s flying off the racks?

Fidelity Index World remains a best-selling fund across multiple major platforms. This is the investment equivalent of a suit or matching top and bottoms – it’s one decision which covers you, it’s an easy purchase and they’re kind of safe and relatively boring. (P.S. Don’t read ‘safe’ as meaning it won’t fall in value – I mean ‘safe’ as in a relatively sensible way to get a well-diversified bundle of leading global companies from a reputable fund firm.)

Fundsmith Equity – a super concentrated fund with just 26 stocks in it – is still ticking many boxes. This is your relatively expensive designer number which you’ve had for years and you still feel good in, but it’s marginally risqué. And Royal London’s Money Market Fund is also popular - this is the white T-shirt. Knowingly and pleasingly boring.

If you are sitting on any cash in your investment platform account, chances are that the rate you are getting on this will be underwhelming and it’s worth at least considering a Money Market Fund as an alternative. Interactive Investor has today announced a small boost to rates on cash held in ISAs from September, paying 1.75% on the first £10,000 in cash, increasing to 2.75% on balances up to £100,000 and 3.75% on £100,000 plus. I can’t remember the last time I saw interest rates so high on platforms, and ii are relatively good on this compared to many – but you’re still not getting a very good deal unless you have mega bucks sitting in cash. The platforms paying the best rates are Bestinvest and Aviva, with investors getting over 4% on idle cash in their accounts.

By comparison, the best-selling Royal London Money Market fund has returned 3.6% over the last 12 months. There’s always an element of risk with any investment fund but this one invests at least 80% in ‘cash and cash equivalents’ so it’s pretty low-risk. Abrdn, Fidelity and Legal & General have cash-like funds also in the bestseller lists if you want to do some more research.

Over in investment trust land, and JP Morgan’s Global Growth & Income Trust is doing well, returning nearly 3% in July. One major contributor has been its overweight position in Uber – their shares are up a blistering 76% this year as they taste profitability for the first time. This trust is a racier number – think tight crop top or yellow mustard cords instead of burgundy ones, depending on your age and demographic! 🤣

And if we consider Exchange Traded Funds – cunning low-cost, pre-packaged ways to access major markets with minimum faff – it’s still all about America with variations of the S&P 500 topping the pops. Surely blue jeans? Old favourite... but remember they will wear out at the knees one day.

Inflation numbers out yesterday in the US were a touch lower than forecast, at 3.2%. Markets were pretty happy about this. It makes it less likely the Fed will increase interest rates in September, and tech firms in particular respond well to this. The blue-chip S&P 500 index was up 0.7 per cent by mid-morning, while the tech-heavy Nasdaq rose 0.9 per cent on the news.

Finally, we’ve some new articles this week for those of you interested in the potential of healthcare as a sector, why markets closer to home can be interesting if you need an income from your investments, a different view on why looking East can be worth considering for income investors – and an update on gold.

Enough fashion tips for one week. You can see the full bestsellers here but remember - mullets and budgie smugglers have also been bestsellers in their time so beware the ‘wisdom of crowds’ as your only guide to what looks good.

Have a great weekend and enjoy the sun.

Holly

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