What funds did investors buy in July?

INVESTORS on the Fidelity platform continued to build money on the side-lines in July, with cash and money market funds climbing the charts of the most popular investments over the month.

The flight to cash has been a trend all year as rising interest rates have improved returns. Cash and money market funds seek a return from institutional cash accounts and short terms bonds that produce a cash-like return. Investors in these funds don't get a guaranteed return from interest - as with a cash savings bank account - but they can expect a return which grows as cash rates rise, with little scope for losses.

The Fidelity Cash Fund topped the best-sellers list among SIPP (self-invested personal pension) investors and was second for ISA fund investors. Only the Fidelity Index World Fund - a low-cost, mainstream option - proved more popular.

The Royal London Short-Term Money Market Fund was in second and third place for SIPP and ISA investors, respectively. The Abrdn Sterling Money Market Fund featured in fourth place on the list of SIPP best-sellers.

That compares to the situation back in January, when the only cash fund among the ISA best-sellers was the Fidelity Cash Fund, in seventh place.

The popularity of these funds suggests investors have become more cautious this year and have recognised the higher returns on cash. There’s sense in that but also risk. Global stock markets have produced strong returns this year, so investors seeking the safety of cash may have missed out.

That said, there are areas of the stock market where investors are still prepared to put their faith. Dedicated technology funds continued to feature high on the best-sellers list in July. The good performance of stocks in the year-to-date is thanks in large part to giant tech companies in the US.

Investors have ridden those gains by buying the Legal & General Global Technology Index Trust (fourth on the list of ISA best-sellers, sixth for SIPP) and the Fidelity Global Technology Fund (fifth for ISAs, seventh for SIPP). Rathbone Global Opportunities Fund, an active fund with a strong record of investing in tech, re-entered the list of best-selling ISA fund in eighth place.

The biggest downward movement over the month was the Legal & General UK Index Trust, which tracks the FTSE All Share and dropped from first place on June’s list of ISA best-sellers to tenth in July.

Bonds are conspicuous by their absence on the best-sellers’ lists. Funds offering some bond exposure via a balanced or multi-asset portfolio have appeared in the top tens this year but did not feature at all in July.

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

1. Fidelity Index World Fund
2. Fidelity Cash Fund
3. Royal London Short Term Money Market Fund
4. Legal & General Global Technology Index Trust
5. Fidelity Global Technology Fund
6. Fidelity Index US Fund
7. Fundsmith Equity Fund
8. Rathbone Global Opportunities Fund
9. Fidelity Global Special Situations Fund
10. Legal & General UK Index Trust Fund

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

1. Fidelity Cash Fund
2. Royal London Short Term Money Market Fund
3. Fidelity Index World Fund
4. Abrdn Sterling Money Market Fund
5. Fundsmith Equity Fund
6. Legal & General Global Technology Index Trust
7. Fidelity Global Technology Fund
8. Fidelity Index UK Fund
9. Fidelity Index US Fund
10. Rathbone Global Opportunities Fund

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

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.