November's most-bought funds

9 December 2014

Neil Woodford's first eponymous fund was the bestselling fund on our sister website Interactive Investor during November as the star manager continues to attract huge inflows.

According to FE Analytics, between 5 November and 5 December CF Woodford Equity Income attracted over £312 million, boosting total assets under management to £3.4 billion from £1.6 billion at its launch in June.

In the six months to 5 December the fund has returned 7.6%, making it the best-performing fund in the Investment Management Association's (IMA's) UK equity income sector over the period.

Rebecca O'Keeffe, head of investment at Interactive Investor, says: "UK equity income funds remain a popular option for investors, as the search for yield continues. Given the stellar performance of his fund, which ranks first out of 93 funds in the sector since its launch in June, it is no surprise to see Neil Woodford top the most-bought funds list yet again."

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Fewer UK funds

Despite Woodford holding on to the top spot, however, the number of UK funds featuring in the top 10 fell to four in November from six in October with investors seemingly favouring global and regional funds.

The most notable absence was Unicorn UK Income, which has featured in the top 10 every month since January but whose performance has suffered since the untimely death of former manager John McClure in June.

Replacing it is Artemis Global Income, which makes its debut in Interactive Investor's top 10 most-bought list as the ninth most bought fund in November.

Managed by Jacob de Tusch-Lec since its launch in 2010, the fund is the best performer in the global equity income sector over three years with a return of 74% compared to 44% from the latter.

Those UK funds that remain in the top 10 include Woodford's former charge, Invesco Perpetual High Income, which was the fifth most-bought fund in November, and Marlborough UK Micro Cap Growth, which re-entered the top 10 in eighth place after a one-month absence.

The second most-bought fund was Asia-focused First State Asia Pacific Sustainability, which like CF Woodford Equity Income has also held on to its place in Interactive Investor's table for the fourth month in a row, despite carrying a mandatory 4% initial charge imposed by the manager.

Over the six months to 5 December the fund has returned 16% (before the 4% charge) compared to just 6.4% from the Asia Pacific ex Japan sector, propelling its one-year return to 25% and three-year return to 67%.

Asian popularity

Newton Asian Income also re-entered the top 10 as the seventh most-bought fund in November following a pick-up in performance that has seen it return over 10% during the past year.

Commenting on the popularity of Asian funds, O'Keeffe says: "After a significant period of underperformance, some Asian stocks have really started to pull away over recent months, with both Japanese and mainland Chinese equities gaining significant momentum.

"Given how far Western equities have come, savvy investors are starting to shift their focus into this region in the hope of generating additional returns."

The third most-bought fund was Fundsmith Equity, which moved up from sixth place in October.

Managed by the highly experienced Terry Smith, the fund has delivered 25% in the year to 5 December compared to just 10% from the global sector thanks to its exposure to high-performing US companies, which account for 60% of the total portfolio.

Axa Framlington Biotech fell from third to fourth as a stellar run of performance may have given new investors cause for pause; since 5 December 2011 manager Linden Thomson has delivered an astonishing 203% for investors, with the past year contributing 45% alone.

The number of tracker funds in the top 10 fell from four in October to two in November with Vanguard LifeStrategy 80% Equities moving up one place to sixth most-bought fund and HSBC FTSE 250 index tracker falling from fifth in October to 10th in November.

This article was written for our sister website Money Observer

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