Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest.

AFTER a shaky start, July turned out to be a very good month for stock markets. While rising interest rates and inflation provided reasons to stay cautious, companies around the globe delivered some much-needed reassurance by reporting positive earnings performances in the second quarter.

Of particular note, the revenues of the majority of America’s tech giants held up well in the three months to June, in sharp contrast to the share price returns of tech shares over the last six months. This added weight to the argument for owning true growth stocks in the midst of a macroeconomic storm.

The debate now is about whether we have simply seen a bear market rally in shares or the low point for the year is now in. Positively, the likelihood of inflation falling back sharply in 2023 is coming onto the radar – a positive for stock markets which like to look forward rather than back.

Past patterns of fund buying on the Fidelity platform remained largely intact in July, but there were a couple of surprises too.

The Fidelity Global Special Situations Fund topped the charts for ISAs and was the second most bought fund for SIPPs. Designed to perform throughout the market cycle, this fund is an out-and-out stock picker, currently showing large holdings in Microsoft, UnitedHealth Group and Canadian Pacific Railway.

In a similar vein, the Fundsmith Equity Fund and Rathbone Global Opportunities Fund – both enduringly popular with global growth investors – continued to see strong demand, with the former being the most bought fund for SIPPs.

The Fidelity Global Dividend Fund slipped out of the top-10 for ISA buys in July but was a popular choice among SIPP investors. It was the only equity income fund to feature in either table, which is somewhat surprising given the proven ability of dividends to smooth out total investment returns or provide an attractive retirement income.

Another surprise in July was the return centre stage of the Ninety One Global Gold. This fund dropped out of the top-10 buys in May having been a firm favourite among investors in each of the previous four months. In July it was back though, ranking second for ISA purchases and sixth for SIPPs.

Gold has stumbled since mid April, reflecting rising US interest rates and a strong dollar, but may now have reached a level (around $1770) where investors are seeing additional value1. This fund remains a potentially useful diversifier in a world of elevated geopolitical tensions and increasing risks to economic growth.

Also new was the absence of June’s best selling fund for SIPPs – the BlackRock Global Funds - World Energy Fund – which has benefited so far this year from its exposure to a broad spread of the world’s largest oil and gas producers.

However, the BlackRock Natural Resources Growth & Income Fund – which casts its net wider to encompass the oil, mining and agriculture sectors – remained popular with SIPP investors.

You can learn more about the outlook for stock markets in Fidelity’s Investment Outlook, the latest edition of which will be published on Wednesday.

1 Kitco, 02.08.22

Top 10 best-selling ISA funds on Fidelity Personal Investing in July 2022

1. Fidelity Global Special Situations Fund
2. Ninety One Global Gold
3. Fidelity Index World Fund
4. Fidelity Cash Fund
5. Rathbone Global Opportunities Fund
6. Fidelity Index US Fund
7. Fundsmith Equity Fund
8. Fidelity Index UK Fund
9. JPM Natural Resources
10. Fidelity Global Technology Fund

Top 10 best-selling SIPP funds on Fidelity Personal Investing in July 2022

1. Fundsmith Equity Fund
2. Fidelity Global Special Situations Fund
3. Fidelity Global Technology Fund
4. Fidelity Cash Fund
5. Rathbone Global Opportunities Fund
6. Ninety One Global Gold
7. Fidelity Index UK Fund
8. Vanguard LifeStrategy 100% Equity
9. BlackRock Natural Resources Growth & Income Fund
10. Fidelity Global Dividend Fund

Source: Fidelity International. Gross ISA and SIPP sales in July 2022 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.

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