Top investment funds, trusts, and equities to invest in - May 2024

Exposure to tech stocks and the growth potential of India have been in favour with investors. Here are the top investment funds, trusts and stocks for May 2024.

A woman looks at the top investment funds' performance on her mobile phone
Interactive Investor reveals the top investment funds every month
(Image credit: © Getty Images)

Every month, we look at the top investment funds, equities and stocks investors are buying into. Tech exposure and interest in India have been the focal points over the last month, according to Interactive Investor research.

US artificial intelligence-adjacent stocks, like chip powerhouse Nvidia, are attracting investment, at the expense of other Magnificent Seven (Mag7) tech giants, such as Tesla. There was also strong demand for the renewable energy sector.

Investment fund Jupiter India has benefitted from the likelihood of another 'market-friendly' Narendra Modi administration. And despite coming under the spotlight in recent months over its performance, the Scottish Mortgage Investment Trust continues to be a firm favourite.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The investment platform has also analysed the net inflows for popular asset classes over the year to 31 May. It found commodities had seen the biggest inflows year-on-year - up 184% - with fixed income not far behind on 91%. Equity and property performed less well.

Myron Jobson, Interactive Investor's senior personal finance analyst, said commodities had benefitted from: "heightened geopolitical tensions and cautious outlooks from central banks supporting the price of precious metals and oil, in particular. This asset has served as a helpful geopolitical hedge, and the outlook for it appears favourable given the possibility that interest rates in developed countries have peaked and will likely be cut this year.

"The reprieve in bond yields, following the return to a higher interest rate environment, has also captured our investors’ attention, with inflows into fixed income investments almost doubling year-on-year."

So, when it comes to investment funds, trusts and equities, which names should you be looking out for? Here are the top 10s, according to Interactive Investor.

Top investment funds ranked

Vanguard LifeStrategy 80% Equity has remained rooted to the top spot. But the big surprise for May's top 10 was that Fundsmith Equity - a former chart-topper - tumbled down the rankings. It fell from second to fifth place on the list of the most popular fund options last month.

Kyle Caldwell, funds and investment education editor at Interactive Investor, said of the change: "Terry Smith remains popular with our customers, but investors are looking to take advantage of more specific trends and opportunities."

In the case of Royal London Short Term Money Market, which has moved up two places to second, the opportunity was "a distribution yield of 5.2% from an area of the bond market that is low risk", Caldwell said. And in the instance of L&G Global Technology Index, which remained in third place, it was "plenty of exposure" to tech, specifically AI.

Jupiter India also grew in popularity month-on-month, having risen from sixth place to fourth in the top 10. Caldwell said: "[It] offers exposure to a fast-growing economy that has favourable demographics, including a young population. India’s stock market has enjoyed a good spell of performance over the past couple of years, and investors buying today will be hoping the purple patch continues."

He added that a "resounding win" for the "market-friendly Narendra Modi" in the Indian election could further boost sentiment. While the results of the election are still being processed, Modi is understood to be on course for a third consecutive term - albeit with a lower-than-expected number of seats that could mean another coalition government gets formed.

Here is the investment fund top 10 for May:

  1. Vanguard LifeStrategy 80% Equity
  2. Royal London Short Term Money Market
  3. L&G Global Technology Index
  4. Jupiter India
  5. Fundsmith Equity
  6. HSBC FTSE All World Index
  7. Fidelity Index World
  8. Vanguard LifeStrategy 100% Equity
  9. Vanguard FTSE Global All Cap Index
  10. Vanguard LifeStrategy 60% Equity

Top investment trusts ranked

Scottish Mortgage Trust, which is particularly exposed to the Mag7 through the likes of Nvidia, Amazon and Tesla, continued to be the most popular investment trust in May. But the allure of tech exposure by no means attracted all comers, with Polar Capital Technology and Allianz Technology both dropping out of the top 10.

Elsewhere, trusts focused on renewable energy infrastructure also received renewed interest from "investment trust bargain hunters", Caldwell said. Two of the three new top 10 entrants - NextEnergy Solar Fund and Gore Street Energy Storage - benefitted from this trend (private equity and infrastructure-focused 3i Group was the other new top 10 entrant).

He added: “Since interest rates started rising in late 2021 investors have been shunning the renewable energy infrastructure sector. Those rate rises have caused a re-pricing of valuations, which has harmed share prices. At the same time that interest rates rise, so do bond yields.

"As a result, income seekers now have more options and can take less risk as the safest types of bonds, UK and US government bonds, now offer yields of around 4% compared to virtually nothing when interest rates were at rock-bottom levels. However, it appears that some investors are now attempting to buy low in the hope that a recovery will play out."

Caldwell also said investment trust discounts have been "widening". He added: "With big discounts and big yields on offer, those investors buying today could argue they are being paid to wait for a change in fortunes. In terms of potential tailwinds, interest cuts would in theory be a positive, as this would likely cause bond yields to fall."

Here are the top 10 investment trusts for May:

  1. Scottish Mortgage (SMT)
  2. JP Morgan Global Growth & Income (JGGI)
  3. Greencoat UK Wind (UKW)
  4. Alliance Trust (ATST)
  5. City of London (CTY)
  6. NextEnergy Solar Fund (NESF)
  7. BlackRock World Mining (BRWM)
  8. 3i Group (III)
  9. F&C Investment Trust (FCIT)
  10. Gore Street Energy Storage Fund (GSF)

Top equities ranked

FTSE 100 heavyweights continued to play a dominant role in the top 10 equities in May. But while some investors were investing in strong performance, others were buying low.

Household names, such as Vodafone, Rolls Royce and Lloyds, all retained their places in the rankings. But the likes of National Grid, EasyJet and Ocado attracted opportunistic buyers.

National Grid saw its share price slide after a rights issue, while the other two have been experiencing more deep-rooted problems. Victoria Scholar, head of investment at Interactive Investor, said: "EasyJet scored a position in the top ten after a major sell-off of shares in the low-cost carrier.

"In fact, easyJet was the worst performer on the entire FTSE 100 last month, plunging over 14%, prompting value investors to make the most of a potential buying opportunity. Its CEO Johan Lundgren announced plans to step down in May, and shares are still sharply below pre-pandemic levels, with its recovery lagging rivals despite strong summer holiday travel demand."

As for Ocado, Scholar said: “[It] could be set to drop out of the FTSE 100 after six years, but that hasn’t stopped Interactive Investor investors from buying up shares in May, with the stock staging a tentative rebound last month, attempting to claw back some of its share price declines since the 2020 highs. Despite the slight pick-up in May, shares are still down by almost 50% so far this year."

While Nvidia rose to the top spot in the rankings, its fellow Mag7 company Tesla slipped out of the top 10. Scholar said its appeal to investors was "fading" due to a near-30% slide in its share price so far in 2024. At the same time, Nvidia's share price is up 130% so far this year.

  1. Nvidia (NVDA)
  2. National Grid (NG)
  3. EasyJet (EZJ)
  4. BP (BP)
  5. Glencore (GLEN)
  6. Vodafone Group (VOD)
  7. Lloyds Banking (LLOY)
  8. Rolls Royce Holdings (RR)
  9. Ocado Group (OCDO)
  10. M&G PLC (MNG)
Henry Sandercock
Staff Writer

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV. 

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years. 

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.