Investment funds are a popular choice for investors that don’t want to pick their own shares. They allow investors to get exposure to a wide range of different shares within their investment portfolio. Here, I take a look at the five most popular investments funds in the UK during January 2022 according to data from Interactive Investor. I also examine the total return of these funds in the last three years. Total return includes share price growth and any dividends paid out to shareholders during the period.
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1. Fundsmith Equity
Topping the table of the five most popular investment funds is Fundsmith Equity. This fund has a three-year return of 57%. The fund invests in global blue-chip companies and has a buy and hold strategy.
It is often described as a Warren Buffett-style fund. He is one of the world’s richest men and has earned an estimated £113 billion in wealth, mainly through long term investing.
The Fundsmith Equity fund is a type of managed fund rather than a passive investment fund because it doesn’t track a total share index.
2. Vanguard LifeStrategy 80% Equity
This fund has a three-year return of 35%. It’s the first of four passive funds in our five most popular investment funds. The fund invests 80% in shares and 20% in bonds and other similar fixed-income investments. It is classed as a passive fund because it invests at least 90% in ‘passive funds that track an index and are managed or operated by the ACD or its associates’.
3. L&G Global Technology Index
This fund has a three-year return of 126%. The fund is another passive fund that aims to ‘track the performance of the FTSE World Technology Index … after the deduction of charges and taxation’.
The Technology Index includes companies in developed and advanced emerging markets that are included within the FTSE World Index. The growth of this fund reflects the amazing performance of technology stocks as a whole in the last three years.
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4. Vanguard LifeStrategy 100% Equity
This fund has a three-year return of 42.1%. The fund invests 100% in shares and is a passive fund that tracks a share index. It has a higher return than the Vanguard LifeStrategy 80% and Vanguard LifeStrategy 60% (below) due to its higher shares allocation, reflecting the growth of global shares indices in the past three years.
5. Vanguard LifeStrategy 60% Equity
This fund has a three-year return of 35.1%. It is another passive fund, and it’s invested 60% in shares and 40% in bonds and other similar fixed-income investments. This fund is usually considered lower risk than the Vanguard Lifestrategy 100% Equity fund because only 60% is invested in equity.
Most experts consider bonds to be a lower risk investment than shares because they are often less volatile in price.
How can you invest in these popular investment funds?
You can invest in these popular investment funds through a stocks and shares ISA, a pension or a share dealing account. If you are employed and haven’t joined your company pension scheme, then it’s a good place to start your investing journey. Your contributions will receive a top-up from your employer and a tax relief boost.
If you need more guidance on investing, then take a look at our guide on stocks and share ISAs and our share dealing guide for beginners.
If you’re ready to invest, then check out our top-rated share dealing accounts.
