Best Funds To Invest In – 10 Popular Picks 2021
looking to invest? While we all want the best home for our money, when it comes to investment what is best for you will depend on your attitude to risk and and your personal requirements.
“Whether you are new to investing or a seasoned investor sometimes we need inspiration”.
To help with your decision making we look at the most popular 10 funds that were bought in January by Interactive Investor users in an ISA, SIPP or Trading Account.
We look at:
10 Most Popular Funds In January 2021
|Fund Name||Ongoing Charge (OCF)||1 Year Return*||5 Year Return*||Factsheet|
|Baillie Gifford American (Class B)||0.51%||107.36%||517.07%|
|Baillie Gifford Positive Change (Class B)||0.53%||74.04%||N/A|
|Baillie Gifford China (Class B)||0.76%||75.62%||N/A|
|Baillie Gifford Global Discovery (Class B)||0.76%||78.47%||331.39%|
|Baillie Gifford Pacific (Class B)||0.71%||79.46%||282.52%|
|Vanguard Life Strategy 80% Equity A||0.22%||5.83%||73.68|
|Vanguard LifeStrategy 60% Equity A||0.22%||4.93%||58.24%|
|Premier Miton UK Smaller Companies||0.91%||110.95%||127.79%|
|Baillie Gifford Long Term Global Growth||0.65%||87.63%||N/A|
Please note the list does not include investment trusts or exchange traded funds (ETFs).
How To Choose The Best Funds To Invest In Right Now?
As with all investing before you press the buy button, you should ask why you are investing and what you want to get out of it.
Do you have an objective in mind? If it is for a house deposit and you are looking to buy in the next 5 years, or if you are investing for your retirement in 20+ years then these are two different objectives which require a different approach.
What is your tolerance to investment risk? If you can’t abide big swings in your investment fund portfolio then a cautious investment approach may be the way to go.
Fund charges are worth taking into consideration as over time the compound affect on your money can be significant. The lower the ongoing charges (OCF) the better.
Do you want a passive or active managed fund? Index tracker or passive funds are generally cheaper than actively managed funds. Index Trackers follow an index and will seek to duplicate the index as closely as possible e.g. The FTSE 100. Fees are generally low e.g. the iShares Core FTSE 100 ETF (LSE:ISF) has an ongoing charge of 0.07%.
With an actively managed fund you pay for a manager to research investments and to buy and sell holdings using their expertise based on market outlook. So for example Fundsmith Equity is managed by Terry Smith & his team has an ongoing charge of 0.95%.
If you are investing via an investment platform the provider will charge a fee. What that fee is will again have an impact.
Some platforms are more cost effective based on the amount you invest. A flat fixed fee platform such as Interactive Investor will generally provide better value for money the more you have invested.
If you are unsure what to invest in most platforms provide ready made portfolios based on risk profiling to make your choice easier. Hargreaves Lansdown, AJ Bell and ii provide this service.
How To Buy funds Online
Today’s investor in 2021 has a lot of options to choose from.
You can invest in a fund directly or via a tax wrapper such as an ISA or self Invested Personal Pension. If you are investing on behalf of a child you can invest via a junior ISA or junior SIPP.
You can invest using an investment platform typically from £50 pm.
One of the key considerations is cost. However picking the “cheapest” is not as simple as it sounds, as each platform has its own costing model which often makes it difficult to compare like for like.
Other considerations include:
- How easy is the platform to use and what tools and research is on offer
- What fund discounts are there? different platforms have negotiated different discounts on funds
- Customer reviews – useful in understanding strengths and weaknesses of platform providers
- Level of customer service provided
Below we have outlined what can expect to pay in charges for 4 of the UK’s largest most popular investment platforms based on investing in the L&G Global Technology Index fund.
|Investment Platform||Platform Fees||Example - Ongoing Fund Charge (OFC)||Annual Charge on £10,000||Annual Charge on £40,000||Annual Charge on £100,000||Annual Charge on £250,000|
|Interactive Investor||£9.99 pm flat fee||0.32%||£152||£248||£440||£920|
|Hargreaves Lansdown||0.45% up to £249,999, reducing|
to 0.25% from £250,000 to £1m
|AJ Bell||0.25% on first £250K||0.32%||£57||£256||£570||£1425|
|Fidelity||0.35% from £7,500 to £249,999,|
reducing to 0.2% from £250,000
As you can see the right platform for you will depend on how much you are investing.
Important Risk Information:
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.