What funds did investors buy in April?

EARLY-BIRD ISA and SIPP investors had calmer market conditions on their side in April. Inflation data arrived within the confines of expectations, and falling energy and wholesale food prices are now widely expected to start taking effect this summer. 

Meanwhile, the company earnings season got off to a good start, with large banks and technology businesses surprising to the upside. America’s VIX – a measure of the cost of insuring against future market shocks – dipped to its lowest levels in a year at around 16, suggesting improved sentiment among professional investors¹.     

The most bought funds by Fidelity’s personal investors reflected this strengthening confidence. Money market funds were largely relegated from the top-10 lists and replaced with funds substantially or entirely exposed to stock markets. 

Former firm favourite the Fundsmith Equity Fund was the month’s big winner. It returned to the top-10 lists in pole position for SIPP purchases and in second place for ISAs. 

In contrast to a disappointing 2022, the market appears to be returning to reward the types of high quality, global growth companies this fund is famous for. 

Microsoft – the fund’s largest holding – enjoyed a strong revival in late April, after results confirming the strength of the company’s cloud computing business. Luxury brands held by the fund including LVMH also helped, amid positive results and optimism over China’s reopening.

Meanwhile, in a dramatic month of results from some of the world’s largest tech companies, the Fidelity Global Technology Fund continued to be a popular choice. April provided investors with a more in-depth look at the possibilities arising out of artificial intelligence, along with results from America’s tech giants that generally beat expectations both in terms of revenues and profits.

It wasn’t just equity funds primarily focused on capital growth that found favour. The safety-first Fidelity Global Dividend Fund also remained a popular choice for both ISAs and SIPPs. 

This fund offers investors the chance to invest in a managed portfolio of some of the world’s strongest dividend payers, and reduce their reliance on the UK stock market, where the largest dividends have become increasingly concentrated among a relatively small number of blue chips. 

One of the fund’s largest holdings – the French pharmaceuticals group Sanofi – continued to make good headway in April, as the company reported surging sales of its leading anti-inflammatory drug².     

Low cost, index tracking funds retained their appeal for some. Once again, the Fidelity Index World Fund, which tracks the MSCI World Index converted back into sterling, was the standout in this regard. It was the most bought fund for ISAs and second most popular choice for SIPPs in April. 

The Legal & General UK Index Trust Fund and Fidelity Index UK Fund also figured strongly among ISA purchases for another month. Both track the FTSE All-Share Index, so provide a broad exposure to the UK stock market.

Meanwhile, the Dodge & Cox Worldwide Global Stock Fund remained among the most bought funds for ISAs for a third consecutive month. Being significantly overweight value stocks, this fund stands to benefit from a possible closing of the valuation gap that has opened up between growth and value stocks over recent years. It could work as a decent counterbalance for investors holding positions in the growth-oriented funds mentioned above, as well as many others. 

This fund is one of Tom Stevenson’s four fund picks for 2023. 

You can discover more investment ideas in Fidelity’s latest Investment Outlook.   

Top 10 best-selling ISA funds on Fidelity Personal Investing in April 2023

1. Fidelity Index World Fund
2. Fundsmith Equity Fund
3. Legal & General UK Index Trust Fund
4. Fidelity Cash Fund
5. Fidelity Index US Fund
6. Fidelity Index UK Fund
7. Fidelity Global Dividend Fund
8. Fidelity Global Technology Fund
9. Fidelity Global Special Situations Fund
10. Dodge & Cox Worldwide Global Stock Fund

Top 10 best-selling SIPP funds on Fidelity Personal Investing in April 2023

1. Fundsmith Equity Fund
2. Fidelity Index World Fund
3. Fidelity Cash Fund
4. Royal London Short Term Money Market Fund
5. Fidelity Global Technology Fund
6. Vanguard LifeStrategy 100% Equity Fund
7. Rathbone Global Opportunities Fund
8. Fidelity Global Dividend Fund
9. Vanguard LifeStrategy 80% Equity Fund
10. Fidelity Index UK Fund

Source: Fidelity International. Gross ISA and SIPP sales in April 2023 for Personal Investors only.

¹ Cboe, 03.05.23
² Reuters, 27.04.23
 

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.