interactive investor, the UK’s second largest platform for private investors, outlines its most popular funds and investment trusts that ii customers regularly buy, using regular investment data since the start of 2022.
In the spirit of interactive investor’s impartial charging model, which does not favour one instrument over another, regular investing is free for funds, investment trusts, and popular UK shares.
Dzmitry Lipski, Head of Funds Research, interactive investor, said: “One of the biggest barriers to investing can often be around market timing worries – and that’s even during less uncertain times. While long-term investors don’t need to dwell on this too much, regular investing can help smooth out some of the highs and lows in the price of shares, because investors buy less when prices are high, and more when prices are low. And since January 2020, regular investing has been free with ii.”
In what has been a turbulent year to date, regular fund investors are tending to stick to passive strategies against the uncertain market backdrop.
Regular investment trust investors are often favouring wealth preservation strategies like Personal Assets and Capital Gearing, but Scottish Mortgage is rooted at the top of the regular investing best buys, alongside other global trusts such as Alliance Trust and F&C investment trust. But there’s still an appetite for specialist trusts, with an Emerging Markets trust in the top 10.
Six of the ten most popular funds to invest monthly with on ii are members of ii’s Super 60 and ACE 40 recommended lists. Meanwhile, 5 of the most bought investment trusts amongst regular monthly investors are ii Super 60 rated.
Most popular funds
In funds land, leading the way with regular investors was Terry Smith’s Fundsmith Equity in first place, followed by two passive picks; Vanguard LifeStrategy 80% and Vanguard LifeStragey 100% Equity. In fifth place was Baillie Gifford Positive Change.
Most popular trusts
Sam Benstead, Deputy Collectives Editor, interactive investor, added: “Trusts continue to capture the attention of investors on our platform, and this is no surprise – given they can present a multitude of long term advantages. Not only do they allow investors to access private stocks and other more typically ‘illiquid’ investments, but they can also borrow money – which is known as ‘gearing’ – to potentially amplify gains. Though investors must be prepared to take the rough with the smooth!”
Lipski said: “Four global trust picks have proven popular with our regular investors – F&C, Alliance Trust, Scottish Mortgage, which ii considers an ‘adventurous’ option, and Monks. While there are differences between the strategies and risk profiles, each have a diversified basket of shares.
“F&C’s diverse portfolio of over 400 companies, and the fact that it is a consistent income payer having increased dividends for over 50 consecutive years, makes the trust a potential core holding for investors.”
Lipski added: “A glaring gap in our most popular regular investing trust picks, however, is property trusts, and there have been a number of headwinds for the property sector. However, the relatively low correlation between property and more conventional assets such as equities and bonds mean that the inclusion of a property option within a portfolio can bring significant diversification benefits.
“We favour the closed-end investment trust structure to access property, and so while the all-too-frequent suspensions of property open-ended funds have revealed flaws, this shouldn’t discourage investors from considering closed ended property trusts on a long-term basis.
“The long-term fundamental case for property as an asset class remains intact and history shows that real assets such as property have often outperformed traditional asset classes during high inflation environments, although past performance is no guide to the future. We like Balanced Commercial Property Trust, which invests in bricks and mortar property, and TR Property, invested in listed property.”
Drip, drip, drip – a reminder of consistency and discipline when it comes to investing
Myron Jobson, Senior Personal Finance Expert, explained: “Regular investing, particularly within these very choppy markets, can be an effective way of building wealth, and can help smooth out the inevitable peaks and troughs.
“The current environment is a stark reminder of the need for discipline and patience when it comes to investing. Drip-feeding cash into investments helps to lower investment risk, smoothing out the inevitable bumps in the market by buying fewer shares when prices are high and more when prices are low – a process known as pound-cost averaging.
“Those who cannot afford to make lump sum contributions because of the cost-of-living squeeze on budgets can benefit from investing little but often. Making monthly contributions helps you get into a good investing habit which could help to grow your wealth over the long term while smoothing out daily stock market fluctuations.”
The value of your investments may go down as well as up. You may not get back all the money that you invest.
Most popular funds and investment trusts on ii since start 1 January 2022 (regular investing) to 20 September 2022
| Funds | Trusts |
| 1. Fundsmith Equity 2. Vanguard LifeStrategy 80% 3. Vanguard Life Strategy 100% 4. Vanguard Lifestrategy 60% 5. Baillie Gifford Positive Change 6. Vanguard US Equity Index 7. L&G Global Technology Index Trust 8. Baille Gifford American 9. Vanguard FTSE Global All Cap Index 10. Fidelity Index UK | 1. Scottish Mortgage Investment Trust 2. Alliance Trust 3. City of London 4. F&C Investment Trust 5. JPMorgan Emerging Markets 6. Monks Investment Trust 7. Personal Assets Trust 8. Smithson Investment Trust 9. Edinburgh Worldwide 10. Capital Gearing |