Every month we look at the most popular funds and stocks investors are buying, but what have been the most purchased investments throughout 2023?
December may be a joyful month but it has been an uncertain year for the financial markets overall with interest rates at an all-time high, inflation and warnings of global economies sliding into a recession - that has been reflected in what investors have been backing during 2023.
Many investors have relied on passive funds in 2023 that track the market instead of beating it- according to Bestinvest, six of their top ten funds mirrored this, including Exchange Traded Funds (ETFs) and investment trusts.
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“Optimism that rate cuts are in sight next year have resulted in a big chunk of equity returns in 2023 coming from November onwards,” says Jason Hollands, managing director at Bestinvest.
“Across the rest of the year, large parts of the market traded sideways. The major positive theme in equities though has been the stellar performance of a concentrated number of mostly mega-cap US stocks seen to be likely major beneficiaries of Artificial Intelligence and, alongside this, a handful of healthcare companies involved with weight-loss drugs.”
Here are some of the most popular funds and equities in 2023, according to activity on the Bestinvest platform.
The most popular funds in 2023
Vanguard dominated Bestinvest’s top ten funds list, with its developed World ex UK Equity Index Fund, 100% and 60% equity funds.
“It has also been notable how clients have strongly favoured passive funds that track rather than try to beat the markets this year, with six of the top 10 pursuing such an approach,” says Hollands:
Although investors have preferred passive funds in 2023, Terry Smith’s Fundsmith Equity Fund was the most popular this year. The actively managed fund launched back in November 2010, and since then, it has had a return of 551%.
Hollands adds: “All of the top 10 funds purchased during 2023 were either solely or principally invested in equities. Six of these had global remits, three were US equity funds and one was a European fund, so clients decisively ploughed cash behind funds with high US equity exposure.”
The list includes three US equity funds and one European fund, but “not a single UK equity fund made the top 10, confirming the market’s unloved status which has driven valuations to multi-decade lows.”
- Fundsmith Equity Fund
- Fidelity Index World Fund
- HSBC American Index Fund
- Guinness Sustainable Energy Fund
- Vanguard FTSE Developed World ex UK Equity Index Fund
- Vanguard LifeStrategy 100% Equity Fund
- Loomis Sayles US Equity Leaders Fund
- Legal & General US Index Trust
- BlackRock European Dynamic Fund
- Vanguard LifeStrategy 80% Equity Fund
The most popular equities for investors
When it came to equities, the top individual shares mirrored the “old economy” with a focus on the financial sector- including Legal & General, Lloyds Banking Group and Barclays.
“Also in the list are oil major BP and commodities giant Glencore,” with BP taking the top spot in November. Glencore moved from fifth to third place in November, after the FTSE 100 company made a deal with miner Teck Resources- giving investors hope that they are buying into a more climate-friendly business rather than just a coal mining one.
Hollands adds: “Defence giant BAE Systems makes it onto the leaderboard as well. BAE has soared on the back of increased defence spending in response to the war in Ukraine and it also looks to be a key beneficiary of the newly signed deal between the UK, Italy and Japan to produce a new sixth-generation, stealth fighter jet.”
- Legal & General PLC
- Lloyds Banking Group PLC
- Aviva PLC
- Rolls-Royce Holdings PLC
- Barclays PLC
- BP PLC
- Vodafone Group PLC
- BAE Systems PLC
- Glencore PLC
- British American Tobacco PLC
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