Hargreaves Lansdown’s Isa clients have largely focused on long-serving fund managers as they sought to navigate turbulent market conditions in August, new data shows.
The £16bn Fundsmith Equity fund, managed by city veteran Terry Smith, the £5.8bn Lindsell Train UK equity fund, which has been managed by Nick Train since 2006, and the £5.5bn Lindsell Train Global Equity fund featured in the top ten most bought funds of the month.
Giles Hargreave, another veteran fund manager, who has run the £1.2bn Marlborough UK Micro Cap fund since 2004, was also on the newly published list.
Dominic Rowles, investment analyst at Hargreaves Lansdown, said: "Unlike bigger businesses, smaller companies tend to be under-researched, which can leave plenty of opportunities for investors prepared to seek them out. The Marlborough UK Micro-Cap Growth Fund proved popular in August with our ISA clients."
Mr Rowles said Mr Hargreave had an "almost unparalleled record" of investing in higher-risk smaller companies.
He said the manager manages risk by investing in a wide variety of shares across a number of sectors, adding the fund was currently focused on technology businesses.
"The fund has done exceptionally well since launch in 2004. It’s risen 733 per cent since then, significantly beating the broader market of UK smaller companies. We put this down to the managers’ ability to invest in companies with outstanding prospects," he said.
He added: "We think the team at Marlborough have the skills and resources to deliver strong performance over the long term."
Tom Sparke, investment manager at GDIM, a discretionary fund management business, said he tends not to invest in funds run by managers such as Mr Train and Mr Smith because of their focus on "one style of investing" - the growth-style.
"When that style is out of favour with the wider market, the funds underperform," he said.
Neil Woodford's £6.8bn Woodford Equity Income fund was also among the most popular funds, alongside two funds run by Hargreaves Lansdown.
The travails of Mr Woodford have been well documented, with the giant mandate having underperformed relative to the IA All Companies sector to the tune of about 27 per cent in three years.
But Mr Woodford’s flagship fund has performed better in recent months, with the lack of exposure to mining and commodity stocks helping performance amid turmoil in emerging markets.
The Stewart Investors Asia Pacific Leaders fund and the Standard Life Global Smaller Companies fund, made up the rest of the list.
Hargreaves Lansdown released its most bought funds list in alphabetical order:
Fundsmith Equity
HL Multi-Manager Income & Growth Trust
HL Multi-Manager Special Situations Trust
Legal & General International Index Trust
LF Lindsell Train UK Equity
LF Woodford Equity Income
Lindsell Train Global Equity
Marlborough UK Micro-Cap Growth
Standard Life Inv Global Smaller Companies
Stewart Investors Asia Pacific Leaders
david.thorpe@ft.com
