In January 2024, was the most-bought fund on the interactive investor platform, based on the number of buys among our customers during the month.
Demand for the global technology tracker fund has been driven by investor optimism over artificial intelligence (AI). The fund holds five of the so-called Magnificent Seven stocks, with large weightings to Apple Inc (NASDAQ:AAPL) (17.4%) and Microsoft Corp (NASDAQ:MSFT) (17.1%), as well as investments in NVIDIA Corp (NASDAQ:NVDA), Alphabet Inc Class A (NASDAQ:GOOGL) and Meta Platforms Inc Class A (NASDAQ:META), and other AI-exposed firms such as Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) and ASML Holding NV (EURONEXT:ASML). It costs 0.32% to own and is one of the most-bought funds among our ISA customers.
- Invest with ii:Open an ISA|ISA Investment Ideas|
The one and three-year total return figures for the fund, at 45.9% and 52.1% respectively, are the second-highest performance figures in the top 10 table. However, it’s important to remember that this fund is a pure technology play, and that these performance figures are over only short-term periods. As my colleague Kyle Caldwell has warned, it is vital to check your investments to determine how much exposure you have to the AI theme, through a tracker fund, for example, before buying more, to maintain diversification.
Following the release of Microsoft’s results this week, City writer Graeme Evans reported on comments by the US tech giant’s chief executive Satya Nadella, who said that Microsoft had transitioned from talking about AI to applying it at scale. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector,” he said.
Not everyone is as upbeat about AI and Terry Smith, star fund manager of Fundsmith Equity, recently expressed scepticism about it in his annual letter to investors in January. Smith is doubtful that investors will be able to handpick winners from AI breakthroughs and suggested that early “winners” may not be long-term success stories. Fundsmith Equity, which rose one place to third in January’s top 10, has only recently been ousted from poll position in the top 10.
2023 was not a glowing year for the £22.7 billion global equity fund, and it fell short of its benchmark for the third year in a row, as we reported. Smith brushed it off, saying that outperformance, or even a positive return, is not something investors should “expect every year”.
Despite Fundsmith’s relegation in our monthly top 10 rankings, it remains a popular ISA holding among ii customers.
- 12 funds to generate £10,000 of income in 2024
- Sign up to our free newsletter for share, fund and trust ideas, and the latest news and analysis
- Jeff Prestridge: these funds are robust long-term pillars of an ISA
The previous month, Royal London Short Term Money Mkt Y Acc was in first place in our top 10, but it slipped to fifth place in January, with investors likely anticipating the first cut to interest rates - held today at 5.25% by the Bank of England - sometime in the spring. The fund is a beneficiary of rising interest rates, allowing investors to earn an income while taking relatively little risk with their money.
Jupiter India rose to fourth place in the table in January. The performance figures are impressive, with one and three-year total returns at 48% and 108% respectively. It seems that many investors with the stomach for emerging market volatility are attracted to investing in a country, where urbanisation, a youthful population and an expanding middle class give them promise growth and the prospect of high returns. India could also be benefiting from investor unease over China’s economy and politics.
The fund’s top 10 holdings include Hindustan Petroleum Corp, Interglobe Aviation and Sun Pharmaceutical Industries.Its top three sector exposures are financials (23.6%), industrials (12.3%), and healthcare (11.8%), according to its latest factsheet. The fund’s ongoing charges figure is 0.99% for the Jupiter I Acc share class, while the L Acc share class costs 1.74%.
The new entry for January was Vanguard LifeStrategy 60% Equity, which has appeared in the top 10 frequently on other occasions. Other low-cost passive funds from the leviathan fund house include Vanguard LifeStrategy 80% Equity(second place), Vanguard LifeStrategy 100% Equity(eighth place), Vanguard US Equity Index (sixth place), and Vanguard FTSE Global All Cap Index (ninth place).
The fund that exited the top 10 in January was Vanguard FTSE Dev World ex-UK Equity Index.
Top 10 most-popular investment funds in January 2024
| Rank | Fund | IA sector | Ranking change since previous month | 1-year return to 1 Feb(%) | 3-year return to 1 Feb (%) |
| 1 | Technology and Technology Innovations | Up one | 45.9% | 52.1% | |
| 2 | Vanguard LifeStrategy 80% Equity | Mixed investment 40%-85% shares | Up one | 6.5% | 16.05% |
| 3 | Fundsmith Equity | Global | Up one | 13.8% | 24.6% |
| 4 | Jupiter India I Acc | India/Indian Subcontinent | Up one | 48.05% | 108% |
| 5 | Royal London Short Term Money Mkt | Short Term Money Market | Down four | 4.97 | 6.73 |
| 6 | Vanguard US Equity Index | North America | Up two | 13.6% | 35.2% |
| 7 | HSBC FTSE All-World Index | Global | Down one | 12.4% | 30.5% |
| 8 | Vanguard LifeStrategy 100% Equity | Global | Down one | 7.9% | 25.9% |
| 9 | Vanguard FTSE Global All Cap Index | Global | Up one | 8.9% | 24.3% |
| 10 | Vanguard LifeStrategy 60% Equity | Mixed investment 40%-85% shares | New entry | 5.1% | 7.01% |
Source: interactive investor and FE Analytics. Note: the top 10 is based on the number of “buys” during the month of January.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
