April's 10 most-bought funds
Star manager Neil Woodford's first eponymous fund, CF Woodford Equity Income, was the most-bought fund in April for the ninth consecutive month, while Vanguard has three tracker funds in the top 10, according to data from our sister website Interactive Investor.
CF Woodford Equity Income has been the most-bought fund on Interactive Investor since its launch in June 2014. Having launched with £1.6 billion of asset under management the fund is now close to £5.5 billion in size.
In the six months to 7 May CF Woodford Equity Income has returned 13%, making it the fifth best-performing fund in the 88-strong UK equity income sector over the period. However, over the past month the fund has struggled, delivering a fourth-quartile return of 0.1%.
Other perennial favourites include Axa Framlington Biotech, Fundsmith Equity and Artemis Global Income, which were the second, third and fourth most-bought funds in April for the second consecutive month.
Managed by biotech expert Linden Thomas, Axa Framlington Biotech has benefited from the strong uptick in the biotechnology sector over the past three years, delivering an impressive 189% since 7 May 2012.
However, the fund has shed close to 3.5% over the past month as commentators begin to question the sustainability of the biotech rally.
Fundsmith Equity, managed by City grandee Terry Smith, has also performed well over the past three years, delivering close to 70% in total returns compared to just 45% from the Investment Association's global sector.
The fund has been propelled by its overweight to US equities over the period; however this could be beginning to hold it back as returns over three months disappoint in the face of rising scepticism over bloated valuations in US equity markets.
Artemis Global Income is another top performer, having consistently delivered top-quartile total returns since its launch in July 2010 while currently paying an above market yield of 3.2%.
The fifth most-bought fund was Vanguard LifeStrategy 80% Equities, a multi-asset tracker fund that is a regular constituent of Interactive Investor's top 10 most-bought list.
Making its debut in the table, however, is stablemate Vanguard LifeStrategy 100% Equities, which was the sixth most-bought fund in April, while Vanguard LifeStrategy 60% Equities made its first appearance since December 2014 at number eight.
The rising success of tracker funds, which passively track indices or other passive vehicles (as is the case in Vanguard's LifeStrategy range) is reflected in statistics recently released by the Investment Association, which show that passive funds saw their largest ever monthly inflow in March.
The main attractions of these vehicles are their low cost, with funds typically carrying ongoing charges figures of below 0.5% and often much lower.
Many, including Vanguard's LifeStrategy range, are also proving themselves in the performance department with the three funds listed above all delivering first or second-quartile returns over one and three years.
In seventh and ninth place in April are Neil Woodford's former Invesco Perpetual funds: Invesco Perpetual Income and Invesco Perpetual High Income, which are both now managed by Woodford's former deputy Mark Barnett.
Despite a bumpy ride following Woodford's departure in March last year, Barnett has managed to hold the funds steady. Over one year they have both delivered in excess of 13.5% in total return terms compared to just 7% from the UK all companies sector while over six months they have both returned over 9.5% each.
The 10th most-bought fund in April was Neptune UK Mid-Cap. Managed by Mark Martin, Neptune UK Mid-Cap is the best performing fund in the 275-strong UK all companies sector over five years, the second best over three years and the fourth best over both one year and six months.
While this is an impressive achievement for any fund, it is especially impressive for a fund that invests in medium-sized companies due to the battering the sector took in 2014. Martin's talents prompted Neptune to put him charge of its UK Opportunities fund in February, since when it has delivered second-quartile returns.
This article was written for our sister website Money Observer
The general term for the rate of income from an investment expressed as an annual percentage and based on its current market value. For example, if a corporate bond or gilt originally sold at £100 par value with a coupon of 10% is bought for £100 then the coupon and the yield are the same at 10%, or £10. But if an investor buys the bond for £125, its coupon is still 10% (or £10) and the investor receives £10 but as the investor bought the bond for £125 (not £100) the yield on the investment is 8%.
Also known as index funds, tracker funds replicate the performance of a stockmarket index (such as the FTSE All Share Index) so they go up when the index goes up and down when it goes down. They can never return more than the index they track, but nor will they lose more than the index. Also, with no fund manager or expansive research and analysis to pay, tracker funds benefit from having lower charges than actively managed funds, with no initial charge and an annual charge of 0.5%.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).