What funds did investors buy in October?

October proved to be a difficult month for UK investors. Budget concerns and trepidation ahead of a critical corporate earnings season weighed on sentiment. Key economic reports from the US pointed to a resilient consumer, forcing markets to scale back their expectations for interest rate cuts. Leading tech shares fell back as markets looked past strong quarterly results and fretted about the near-term costs of AI.

Labour’s Budget received a lukewarm response at best from both shares and gilts, as investors shied away from the prospect of a substantial increase in government borrowing coupled with higher taxes. At the margin, the Budget appeared likely to slow the pace of future interest rate cuts.

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China’s stock market continued to rise strongly at the start of the month following announcements of further measures to boost shares and the economy. The market quickly beat a retreat, however, amid fears the measures may be insufficient to address China’s longer term economic challenges.

Once again, the most bought funds at Fidelity Personal Investing covered an array of investment objectives. While funds investing in money markets and technology companies remained popular, multi-asset funds took two of the top-10 places for SIPPs.

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The Fidelity Index World Fund was the most bought fund for ISAs and second most popular for SIPPs. This fund tracks the MSCI World Index on a net total return basis. Returns are automatically converted back into sterling, providing UK investors with a straightforward and cost-effective route to geographic diversification.

The Fidelity Cash Fund took the same places in reverse order, keeping company with the Royal London Short Term Money Market Fund in sixth place for both ISAs and SIPPS and the Legal & General Cash Trust in ninth for ISAs and third for SIPPs. 

The Legal & General Cash Trust is benchmarked to its money market fund peers, while the other two funds aim to outperform the Bank of England’s SONIA interest rate. This rate remained steady at 4.95% in October. Further cuts in the Bank Rate, however, will cause the SONIA rate to fall. As it stands, SONIA is more than two and a half times the current inflation rate of 1.7%¹.

The Fidelity Global Dividend Fund rose a place to third for ISAs but fell one place to fifth for SIPPs. This fund aims for a dividend-based total return, with capital preservation the top priority. Robust companies from sectors such as consumer staples and pharmaceuticals are well represented, alongside large weightings in industrials and financial services companies. Europe is the largest regional exposure at present.

The Legal & General Global Technology Index Trust took both fourth places. This fund tracks the FTSE World Technology Index and had 255 holdings at the end of September. The ten largest holdings – led by Apple, Microsoft and Nvidia – now make up around 70% of the portfolio².

In fifth for ISAs and tenth for SIPPs was the Fidelity Index US Fund. Like the Fidelity Index World Fund above, this fund tracks its target index (the S&P 500 in this case) on a net total return basis.  

The Legal & General Global Equity Index Fund climbed the tables, rising from tenth to eighth for SIPPs and re-entering the top 10 for ISAs for the first time since July. This fund aims to deliver growth and income by tracking the FTSE World Index.

In seventh for SIPPs was the first of two multi-asset funds – the Vanguard LifeStrategy 80% Equity Fund. This fund sits at the more aggressive end of Vanguard’s LifeStrategy family of funds. While it invests mostly in index tracking funds from the Vanguard stable, the manager has discretion over which funds are selected and how much is allocated to each.

The Fidelity Multi Asset Allocator Growth Fund took ninth place for SIPPs. This fund aims to increase in value over a period of five years or more and allocates at least 70% to index tracking funds. Like the Vanguard fund above, it invests in a combination of shares and bonds. Shares currently account for slightly less than 60% of the portfolio.

The Fidelity Global Technology Fund rose a place to eighth for ISAs but slipped out of the top 10 for SIPPs. This actively managed fund has the ability to take much reduced positions in the market’s biggest tech stocks or miss them out altogether. The Fund’s top 10 holdings currently account for around 37% of the portfolio.

Taiwan Semiconductor, the maker of high-end Nvidia AI chips, is the largest holding at 6.2%. Microsoft and Apple– 6.1% and 4.5% respectively – come next. Sweden’s Ericsson, Texas Instruments and the US business software provider Workday also feature among the top 10.

Finally, the Jupiter India Fund stayed in the top 10 for ISA purchases, but only just. It slipped to tenth place from sixth in September. This is another active fund built from the bottom up. Current large holdings include the tobacco manufacturer Godfrey Phillips India, Bharat Petroleum and Fortis Healthcare³.

Following a tremendous succession of gains this year, the Indian stock market experienced a difficult October, brought about by valuation concerns as well as a switch of focus to China’s economic stimulus measures. Positively, the IMF upgraded its 2024 economic growth forecast for India to 7.0% during the month, from 6.8% at the time of its April update⁴.

September’s third best selling fund for ISAs – the Legal & General European Index Trust – and the Legal & General UK Index Trust, which topped the ISA best sellers list in June, both dropped out of the top 10 in October.

Top 10 best-selling ISA funds on Fidelity Personal Investing in October 2024

1. Fidelity Index World Fund
2. Fidelity Cash Fund
3. Fidelity Global Dividend Fund
4. Legal & General Global Technology Index Trust
5. Fidelity Index US Fund
6. Royal London Short Term Money Market Fund
7. Legal & General Global Equity Index Fund
8. Fidelity Global Technology Fund
9. Legal & General Cash Trust
10. Jupiter India Fund

Top 10 best-selling SIPP funds on Fidelity Personal Investing in October 2024

1. Fidelity Cash Fund
2. Fidelity Index World Fund
3. Legal & General Cash Trust
4. Legal & General Global Technology Index Trust
5. Fidelity Global Dividend Fund
6. Royal London Short Term Money Market Fund
7. Vanguard LifeStrategy 80% Equity Fund
8. Legal & General Global Equity Index Fund
9. Fidelity Multi Asset Allocator Growth Fund
10. Fidelity Index US Fund

Source: Fidelity International. Gross ISA and SIPP sales in October 2024 for Personal Investors only.

Sources: 

¹ Bank of England, 31.10.24, and ONS, 16.10.24
² LGIM, 30.09.24
³ Jupiter Asset Management, 30.09.24
⁴ IMF, 22.10.24 

Important information: - investors should note that the views expressed may no longer be current and may have already been acted upon. Before investing into a fund, please read the relevant key information document which contains important information about the fund. Eligibility to invest in a SIPP or ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. Withdrawals from a SIPP will not normally be possible until you reach age 55 (57 from 2028). Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment.  If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.