What funds did investors buy in June?

AS we cross the halfway mark of the year, it’s interesting to take a step back and see what fund-buying patterns have emerged over the past six months. Despite markets getting off to a strong start in 2023, investors were cautious in their approach. And this sentiment only seems to have grown over the first half of the year.

Back in January, sales data showed that the Fidelity Cash Fund secured the top spot among SIPP holders, while low-cost index trackers Fidelity Index World Fund and Fidelity Index US Fund grabbed the attention of ISA holders.

Money market funds started to make an appearance in investors’ portfolios back in February. These are lower risk open-ended mutual funds which invest in short term cash deposits, money market instruments and high-quality bonds. (Here's a great article about money market funds by my colleague Tom Stevenson if you missed it).

And it was the SIPP investors (looking to protect the value of their portfolios as inflation remained high and interest rates crept up) who led the march. This landed the Royal London Short Term Money Market Fund sixth place in the best-selling funds for February.

As the months passed, the appetite for money market funds didn’t disappear for SIPP investors. If anything, it gained momentum as turmoil in the banking sector unsettled the markets in March. While ISA investors didn’t fall for money market funds’ charms until May of this year.

Now, in June, with inflation remaining stubbornly high and interest rates up to 5% (with many thinking they could peak at 6.25%). ISA investors have made Royal London Short Term Money Market Fund their fifth most bought fund and Abrdn Sterling Money Market Fund their ninth.

Beyond money market funds, investor sentiment remained cautious with cash funds and cheaper tracker funds topping the charts throughout the year.

One fund that’s not fallen out of favour over the entire six months is the Fidelity Index World Fund. This stalwart has remained in the top two slots for both SIPP and ISA investors over the six months (the exception being for ISA investors in May, when it slipped to third). This fund tracks the MSCI World Index converted back into sterling, so offers an attractive way of diversifying away from an investment portfolio composed mainly of UK shares at minimal cost.

And while technology remains a draw for investors, interest has fluctuated over the last six months. The Fidelity Global Technology Fund has ranked sixth and upwards for SIPP investors. While ISA investors kept it in the middle to bottom half of their top ten. This fund is a highly selective investor in the technology space, aimed at investing in a combination of growth companies with disruptive technologies; more cyclical businesses with stronger balance sheets; and special situations that are either undervalued or expected to benefit from a forthcoming catalyst.

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

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

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

1. Fidelity Index World Fund
2. Fidelity Cash Fund
3. Royal London Short Term Money Market Fund
4. Fidelity Global Technology Fund
5. Legal & General Global Technology Index Trust
6. Fundsmith Equity Fund
7. Fidelity Index UK Fund
8. Legal & General Cash Trust
9. Vanguard LifeStrategy 60% Equity Fund
10. Vanguard LifeStrategy 100% Equity Fund

^{Source: Fidelity International. Gross ISA and SIPP sales in June 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.