Baillie Gifford American tops December regular savings picks amid growth resurgence
investmentweek.co.ukInvestors have been topping up their investments in US and global equity funds.
The other active funds on the top ten list of funds bought through regular savings last month were Fundsmith Equity, Lindsell Train Global Equity and Rathbone Global Opportunities. Notably, no fixed income funds made it to the list.
Passives continued to dominate, however, with Fidelity Index World securing the second spot, while Legal & General International Index Trust, Legal & General UK Index, Legal & General US Index, USB S&P 500 Index and Vanguard LifeStrategy 100% Equity also featured in the lineup.
Joseph Hill, lead investment analyst at Hargreaves Lansdown, said that optimism around earlier than expected rate cuts had reignited investor interest in growth-focused funds.
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«When interest rates come down that is likely to benefit share prices, and particularly those companies with lots of growth potential,» he said.
«Given that lots of these companies are based in the US, it is not a surprise to see investors topping up their investments in US focused funds, or global funds, which tend to have hefty US allocations.»
However, he noted that does not mean rate cuts early this year are guaranteed, but that markets expect rates to come down sooner and by more than Fed projections suggest.
When it comes to share picks, investors have shown a preference for more defensive options and beaten up sectors, such as UK financial services, with Aviva topping the list of shares bought through regular savings.
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According to Sophie Lund Yates, lead equity analyst at Hargreaves
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