Best-selling funds, investment trusts and ETFs of January 2024

January was an interesting month as we saw the behaviour and sentiment of retail investors differ from the more cautious approach of professional investors.

For retail investors (that's ordinary, non-professional folks), the funds they bought in January were largely about optimism, innovation and growth. Whereas institutional investors’ risk appetite fell in January according to the State Street Risk Appetite Index.

These investors preferred ‘defensive’ relative to ‘cyclical’ sectors, as well as quality stocks. And in fixed income (or ‘bonds’), there was more demand for developed markets and core sovereign bond markets (things like US government bonds, also called ‘Treasuries').

A defensive stock is a share in a company that provides consistent dividends and stable earnings regardless of the general mood of the stock market - well-established and profitable companies who make ‘boring’ products, such as Procter & Gamble, Johnson & Johnson, Philip Morris International and Coca-Cola.

Overall, the poor old FTSE 100 remains unloved and arguably looks cheap. Although on the flip side, it has looked cheap for a while and being cheap is only a positive if it goes up one day - but we live in hope!

Some contrarians are taking the opportunity to buy into this index but the majority vote is still all about the stars and stripes over the Atlantic.