December's ten most-bought funds

Published by Tanzeel Akhtar on 07 January 2014.
Last updated on 07 January 2014

Coins and paper

The latest data from our sister website Interactive Investor shows the most-bought funds for the month of December were UK smaller company focused.

Paul Marriage's Cazenove UK Smaller Companies fund was the most-bought offering for the fourth consecutive month.

Last year Schroders announced it would close the small-cap fund managed by Marriage to new money on 22 January 2014, subject to regulatory approval.

It seems, as the UK economy begins to recover, many investors are turning to UK small-cap funds for gains.

Chartered financial planner at Chase de Vere Patrick Connolly says: "Investments which have performed strongly usually become more popular with investors. In 2013 the UK Smaller Companies sector was the top performer, with the average fund returning more than 37% in the year."

Connolly explains sentiment toward the UK smaller companies sector continues to be positive, with smaller companies likely to benefit if the UK economic recovery continues as many expect.

However, he warns: "Strong recent performance should be seen as a warning sign rather than a reason to invest; those jumping in now are doing so after big gains have already been made."

The second most-bought fund on Interactive Investor was the £26.2 million CF Miton UK Smaller Companies fund managed by Gervais Williams and Martin Turner. The fund primarily invests in UK-quoted smaller companies.

Top holdings in the Miton fund include Quindell, MichelMersh Brick Holdings, SQS Software Quality Systems, Brady, Burford Capital, Shore Capital Group, Amino Technologies, Everyman Media Group, CML Microsystems and International Greetings.

Over one year, CF Miton UK Smaller Companies has returned 50.3% compared with an average of 32.6% in the UK smaller companies sector.

Gold back on track?

The next most-bought fund is the £60.7 million Investec Global Gold fund managed by Bradley George and Scott Winship.

Top holdings in the fund include Randgold Resources, GoldCorp, Barrick Gold, Franco-Nevada, DB Physical Gold, New Gold Issuer, Yamana Gold and Regis Resources.

The first half of 2013 was tough for gold, the price went from $1,675 (£1,020) per ounce to less than $1,200, but during the second half of 2013 the price of gold showed some recovery regaining the $1,400 level.

Julian Jessop, chief global economist at Capital Economics, highlights there are various factors that will undermine the price of gold in 2014. He says: "We see more positives than negatives for gold.

"Producers are reportedly starting to sell their output in the futures market to lock in prices that are still historically high. In the meantime, the swing from central bank selling to buying could be complete."

The fourth most-bought fund on Interactive Investor is Terry Smith's £1.5 billion Fundsmith Equity fund. Last month Smith's fund was the third most-bought fund on Interactive Investor. Over one year, the fund has returned 21.1% compared with an average of 17.4% in the Global sector as at 3 January.

Next we have another small-cap offering, the Unicorn UK Smaller Companies fund managed by John McClure, who also co-manages Unicorn Free Spirit with Fraser MacKersie; and Unicorn Smaller Companies and Outstanding British Companies funds with Chris Hutchinson.

Top holdings in the Unicorn UK Smaller Companies fund include Berendsen, Electrocomponents, ROC Group, Interserve, Menzies, Cineworld, Premier Farnell, Brewin Dolphin, Marston and Mucklow.

Over one year, the fund has returned 37.9% compared with an average of 22.7% in the UK equity income sector as at 3 January.

Sixth is the Invesco Perpetual Monthly Income Plus fund, managed by Paul Causer, Paul Read and Ciaran Mallon. Over one year, the fund has returned 9.1% compared with an average of 3.03% in the sterling strategic bond sector as at 3 January.

Richard Buxton's Old Mutual UK Alpha fund fared well as the seventh most-bought fund for the month of December. Buxton, head of equities at Old Mutual Global Investors, has expanded his fund range with a new launch.

Buxton invests in a portfolio of predominantly UK equities, either directly in transferable securities or through collective investment schemes.

Top holdings in Old Mutual UK Alpha fund include HSBC, Lloyds Banking Group, International Consolidated Airlines, Royal Dutch Shell), Rio Tinto, GlaxoSmithKline, Resolution, Genel Energy, Glencore Xstrata and Barclays.

Next is the £673 million HSBC FTSE 100 Index fund, which aims to provide long-term capital growth by matching the return of the FTSE 100 Index. The ninth most-bought fund is the £991 million Schroders US Mid Cap fund, managed by Jenny Jones.

Last but not least is the L&G US Index unit trust which tracks the performance of the FTSE World USA Index.

This feature was written for our sister website Interactive Investor

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