What funds did investors buy in October?

While shares and bonds rebounded quite sharply at the end of the month, October was disappointing overall. In the US, the S&P 500 Index fell for a third consecutive month, while 10-year government bond yields temporarily rose above 5%. Both events were linked to jitters about whether or not interest rates have peaked. 

Against this backdrop, the technology mega-caps still found the going difficult. Quarterly results from the main players were good to mixed, but October became a month to zero in on the negatives.

Concerns included a falling momentum in cloud sales affecting companies such as Alphabet and Amazon. Results from Apple at the end of the month were broadly as expected, with iPhone sales holding up well but overall group revenues down 1% on the same time last year. 

Buying patterns at Fidelity Personal Investing were similar to those in September, with agnostic stock index trackers, world technology funds and money market funds remaining very popular.

The Legal & General European Index Trust was a fresh arrival, placed second for ISA purchases. Tracking the FTSE World Europe ex UK Index, this £3 billion fund, currently with 557 separate holdings, provides a broad exposure to both large and medium sized companies across the continent¹. 

It was, however, the Fidelity Index World Fund which took the top slot for both ISA and SIPP purchases once more. This fund tracks the MSCI World Index converted back into sterling. It has an ongoing charge of just 0.12%, so offers an attractive way of diversifying an investment portfolio composed mainly of UK funds or shares.

Next up, money market funds featured strongly in the next few places for both ISAs and SIPPs. This time, the Royal London Short Term Money Market Fund displaced the Fidelity Cash Fund as the month’s most popular choice in this category.

Following recent increases in central bank interest rates, bond and equity funds are now facing some stiff competition from cash funds. While some investment grade corporate bonds now offer more in terms of yield, money market funds have the added attraction of high levels of safety.

At the end of September, around three quarters of the Royal London Short Term Money Market Fund was invested in cash and cash equivalents, with the remainder in Treasury bills, short-dated gilts and covered bonds. The Fund’s yield to maturity was 5.46%². Please note this yield is not guaranteed.

Once again, the Legal & General Global Technology Index Trust and the Fidelity Global Technology Fund vied for being the most popular, technology focused fund of the month. This time round, the passively managed Legal & General fund won out, but only just among SIPP buyers.

The Fundsmith Equity Fund continued to find support among both ISA and SIPP buyers in October. Microsoft replaced the Wegovy weight-loss drug firm Novo Nordisk as the Fund’s largest holding during the month, while a new position in the US cybersecurity company Fortinet was introduced.

This fund is known for its long term positioning in high quality, global growth companies, meaning that a new name entering the portfolio is a relative rarity. Having said that, the Fund’s sector exposures have changed a fair bit since the pandemic. Consumer staples and healthcare companies now account for around 55% of the portfolio³.

Making a return to the top-10 for SIPP purchases was the Fidelity Global Dividend Fund. This fund features on Fidelity’s Select 50 list. It also offers investors the chance to invest in some of the world’s strongest dividend payers, thereby reducing reliance on the UK stock market where payout volumes have become increasingly concentrated among a handful of blue chip companies.

Finally, the Legal & General Global 100 Index Trust stayed for a second month among the most bought funds for SIPPs. This fund tracks the S&P Global 100 Index, which could be viewed as a FTSE 100 for the world. A sign of the times – Exxon Mobil is the fund’s largest non-technology holding in seventh place⁴.

For more investing ideas, Fidelity’s final Investment Outlook for 2023 is out now.

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

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

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

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

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

Sources

¹ LGIM, 30 September 2023
² RLAM, 30 September 2023  
³ Fundsmith, 31 October 2023
⁴ LGIM, 30 September 2023  

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.