Hargreaves Lansdown publish their list of the most popular funds purchased each month within their ISA accounts. While this isn’t necessarily a guide to what investors should be investing in, it does provide a useful indicator as to where sentiment currently lies.
Here are five of the most popular funds bought in the Hargreaves Lansdown ISA in May
|CF Woodford Equity Income|
|CF Lindsell Train UK Equity (Class D)|
|Fundsmith Equity (Class I)|
|Jupiter India (Class X)|
|Lindsell Train Global Equity (Class D)|
It’s interesting to note that the CF Woodford Equity Income and CF Lindsell Train UK Equity (Class D) UK focused funds remain on the list. It would appear that Investors are unconcerned by the forthcoming elections and the ongoing Brexit negotiations. This suggests that either sentiment remains positive for UK stocks in the medium to long term, or, it’s a case of better the devil you know. Don’t forget, our list of popular funds are based on investments by UK investors. Sticking with UK stocks may be a habit some investors just can’t kick.
Spreading risk worldwide
There’s a global focus too. Both the Fundsmith Equity (Class I) and Lindsell Train Global Equity (Class D) funds have a remit to scour the globe looking for the right opportunities. At the time of writing, you’ll find a heavy bias towards US and UK equities but these stocks tend to be multi-nationals, providing products and services to businesses and consumers around the world.
With strong historical performance from both funds, their inclusion suggests that investors are looking for geographical diversification. While the global economy is on the up, consumer spending power should mean positive growth for the stocks invested within both funds.
The most interesting fund on this list – as it has been throughout 2017 – remains the Jupiter India (Class X) fund. Geared towards equities, the funds’ investment weighting is spread across a range of sectors that are designed to offer exposure to the spending power of the emerging middle classes – that’s several hundred million citizens. Their rising income is likely to fuel the next leg of India’s economic growth.
Investor sentiment towards India suggests there’s a real demand for exposure to the country. Emerging markets are often thought of as riskier investments that tend to yield attractive returns over a longer period of time – enabling funds to ride out any volatility. A focus on India rather than the Asia region or Emerging Markets is likely to be an interesting indicator for investors.