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.

THERE was no real letup in the malaise pervading world markets for much of May. The war in Ukraine and interest rate jitters both sides of the Atlantic weighed on sentiment, as did warnings from a growing number of companies that rising costs were impacting earnings.

Something else that stayed the same was the relative strength of the UK stock market. In particular, a preponderance of global dollar earners and defensively positioned staples and healthcare companies helped the FTSE 100 build on its year-to-date performance advantage1.

In this environment, the Fidelity Index UK Fund remained a popular choice among both ISA and SIPP investors. This fund tracks the FTSE All-Share Index for a low annual fee of just 0.06%.

However, another index tracker – the Fidelity Index World Fund – took the top slot for ISA buys for a second consecutive month. This fund tracks the MSCI World Index converted back into sterling, so offers investors with mainly UK-based portfolios a readymade way to add some global exposure.

The best seller for SIPPs and fourth most bought fund among ISA investors was the ever popular Fundsmith Equity Fund. This fund is founded on a relatively small number of high quality global growth companies and continues to have the majority of its assets (83%) invested in the technology, consumer staples and healthcare sectors2.

Overall, the draw of funds with large technology exposures seemed to wane a little. Former best seller the Rathbone Global Opportunities Fund slipped into ninth place for ISA buys and was the tenth most bought fund for SIPPs. On the other hand, the Fidelity Global Special Situations Fund held firm as the second most bought fund for ISAs.

The debate about technology stocks raged for another month, with advocates suggesting sharp declines in valuations since the start of the year have presented attractive possible entry points for investors.

Pitted against that though were persistent concerns about interest rates, especially after the Fed raised its benchmark rate by half a percentage point in early May. Higher rates render the immense long term earnings potential of technology businesses less valuable in today’s money.

SIPP investors took to the commodities sector in force last month, with no fewer than three funds represented among the top-10.

The BlackRock Global Funds - World Energy Fund taps straight into a rising oil price and energy demand with its broad exposure to some of the world’s biggest oil majors (Shell, Exxon-Mobil, Chevron etc.)3. With the US driving season and easing of lockdowns in China next on the global agenda, oil looks well underpinned around current levels.

Conversely, the Ninety One Global Gold Fund was one of May’s casualties, dropping out of the top-10 for both ISA and SIPP purchases for the first time this year. Gold has stumbled since mid April amid rising interest rates, but should still prove a useful diversifier in a world of elevated geopolitical tensions and increasing risks to economic growth.

Source:
1 Bloomberg, 06.06.22
2 Fundsmith, 31.05.22
3 BlackRock, 29.04.22

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

1. Fidelity Index World Fund
2. Fidelity Global Special Situations Fund
3. Fidelity Cash Fund
4. Fundsmith Equity Fund
5. Fidelity Index UK Fund
6. Fidelity Global Dividend Fund
7. BlackRock Global Funds - World Energy Fund
8. Fidelity Index US Fund
9. Rathbone Global Opportunities Fund
10. Vanguard LifeStrategy 80% Equity Fund

Source: Fidelity International. Gross ISA sales in May 2022 for Personal Investors only.

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

1. Fundsmith Equity Fund
2. BlackRock Global Funds - World Energy Fund
3. Fidelity Cash Fund
4. Fidelity Index World Fund
5. Fidelity Index UK Fund
6. Lazard Commodities
7. BlackRock Nat Resources Gth & Income
8. Vanguard LifeStrategy 80% Equity Fund
9. Fidelity Index US Fund
10. Rathbone Global Opportunities Fund

Source: Fidelity International. Gross SIPP sales in May 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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