Where Are Investors Putting Their Money in 2024?

In a recent article, Fidelity revealed the 10 most popular funds that retail investors put money into via their Stocks & Shares ISAs in the first half of 2024.

These insights are intriguing given the current economic landscape.

The year so far has been marked by continued technological dominance, with AI optimism fueling much of the growth.

Despite ongoing global uncertainties, including general elections in several countries and fluctuating interest rate expectations, investor appetite for certain funds has remained strong. And some of the most popular funds are really surprising.

Let’s delve into the most popular funds* on Fidelity this year — and what they might tell us about the current market sentiment.

*In ISAs from casual/retail investors in the first half of 2024.

This is not investment advice, we are not financial advisers. All investments have risk and can increase or decrease in value.

While obvious to many, we need to point out that this only includes funds that are available on Fidelity, and does not include the entire market of index funds or ETFs.

Instead of focusing on the exact fund, it’s probably more interesting to look at what each fund does — there will be lots of similar funds covering the same types of investments on other platforms.

1. Fidelity Index World Fund

Management	ISIN	Equity Holdings	TER/OCF
Passive	GB00BJS8SJ34	1,429	0.12%

The most popular fund for ISA investors on Fidelity this year tracks the MSCI World Index, offering global exposure to equities (stocks) from developed markets.

Its popularity in 2024 reflects investors’ confidence in world stock markets, even in the face of uncertainties.

Or, it could be argued that these uncertainties are leading more people to focus on buying the whole haystack — because they don’t know which needle to go for. That said, global coverage will likely always remain popular.

The fund’s recent strong performance is bolstered by its significant allocation to the US market and tech giants.

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2. Fidelity Cash Fund

Management	ISIN	Equity Holdings	TER/OCF
Active	GB00BD1RHT82	N/A	0.15%

One of the most interesting inclusions in this list is the second most popular fund; it doesn’t invest in stocks and shares.

With UK interest rates at multi-year highs, money market funds have become attractive options for a reasonable potential return with much lower volatility.

The Fidelity Cash Fund maintained a steady SONIA* interest rate benchmark of 5.2% throughout the period, more than double the UK’s official inflation rate figure from April and May.

*SONIA is the rate that banks pay to borrow GBP overnight from other financial institutions.

The fund offers a distribution yield of 5.16% at the time of writing — the value in interest expected to be paid over the next 12 months — although this is not guaranteed.

3. Legal & General Global Technology Index Trust

Management	ISIN	Equity Holdings	TER/OCF
Passive	GB00B0CNH163	249	0.32%

Tracking the FTSE World Technology Index, this fund benefited from the tech sector’s strong performance in early 2024. The portfolio’s concentration in top tech firms (70% in the top 10 holdings) has driven its growth.

Notable changes within the fund include Microsoft overtaking Apple as the fund’s largest holding back in January — potentially even more interesting now that Warren Buffett has sold around 56% of his Apple stock.

However, at the time of writing, Apple is the fund’s biggest holding once again.

4. Fidelity Index US Fund

Management	ISIN	Equity Holdings	TER/OCF
Passive	GB00BJS8SH10	503	0.06%

Unexpectedly for many, the only S&P 500 tracker that makes this list sits in fourth place for popularity.

Its top holdings — Microsoft, Apple, and NVIDIA — have been at the forefront of the AI rally. And the US market is, unsurprisingly, the most popular region-specific index in this list.

Warren Buffett’s common investing recommendation for retail investors is to just passively buy an S&P 500 index fund… but judging by popularity, not everyone is taking this advice on board!

5. Fidelity Global Technology Fund

Management	ISIN	Equity Holdings	TER/OCF
Active	LU1033663649	99	1.04%

Unlike the passively-managed global technology fund that already featured in third place, this fund takes a more balanced approach with modest weightings in market giants and more exposure to medium-sized tech businesses.

While Legal & General’s fund allocated over 85% of its funds towards the US market, this actively-managed fund from Fidelity comes with a much lower reliance on America — making up just shy of 59% of its holdings currently.

Taiwan Semiconductor, NVIDIA’s main chip supplier, became the top holding in April, showcasing the fund’s strategic positioning in the AI supply chain.

6. Jupiter India Fund

Management	ISIN	Equity Holdings	TER/OCF
Active	GB00B4TZHH95	87	0.99%

Arguably the most interesting inclusion in this list was the sixth most popular investment for ISA investors in 2024, the Jupiter India Fund. This is an actively managed fund focusing on investments in the Indian market.

Despite a brief setback due to election results, this fund rebounded quickly, capitalising on India’s excellent growth prospects.

The IMF upgraded India’s 2024 economic growth forecast to 6.8% in April, and it sits at 7% as of August 2024.

The Jupiter India fund’s selective approach, with a portfolio comprising of only 87 equity holdings, has served it well recently — will that continue going forward?

7. Legal & General UK Index Trust

Management	ISIN	Equity Holdings	TER/OCF
Passive	GB00B0CNGN12	361	0.17%

This fund tracks the FTSE All-Share Index, providing broad exposure to the UK market — with holdings in 361 companies listed on the UK stock market.

Its popularity, particularly in June, could suggest renewed interest in UK equities despite ongoing economic challenges.

However, sources have told Financial Interest that retail investors in the UK just really like the UK market, and can find it off-putting when portfolios don’t allocate a big enough share to the UK.

Is this national pride, sensible investing, or both?

8. Fidelity Global Dividend Fund

Management	ISIN	Equity Holdings	TER/OCF
Active	GB00B7GJPN73	41	0.92%

This fund focuses on generating returns from dividends and dividend growth, and “seeks to deliver an income that is at least 25% more than the income produced by companies included in the index.”

It maintains a defensive stance with strong representation in consumer staples and pharmaceuticals, alongside exposures to industrials and financial services.

This is one of the only funds in this list that doesn’t have large allocations towards tech-focused businesses, although Taiwan Semiconductor Manufacturing Co Ltd is still its fourth biggest holding.

The fund’s European and US exposures reflect a balanced global approach.

9. Legal & General Global Equity Index Fund

Management	ISIN	Equity Holdings	TER/OCF
Passive	GB00B83LW328	2,422	0.13%

Tracking the FTSE World Index, this fund offers investors a way to capture global equity performance across both developed and emerging markets, providing extensive diversification.

It’s similar to the most popular fund in this list — it’s globally diverse, passively managed, and has low fees.

However, this fund is managed by Legal & General rather than Fidelity, and includes an even larger range of equities in its portfolio — 2,422 vs 1,429. This is because the FTSE World Index includes emerging markets, whereas the MSCI World Index does not.

With emerging markets included, there’s slightly less reliance on America and Europe, and a touch more exposure (around 4%) to Asia.

10. Fundsmith Equity

Management	ISIN	Equity Holdings	TER/OCF
Active	GB00B41YBW71	28	0.94%

Finally, there’s the Fundsmith Equity fund, the smallest equity-focused fund in this list with just 28 holdings in its portfolio.

Known for its extremely long-term holding strategy, the Fundsmith Equity fund made a rare addition in April by buying shares in Texas Instruments.

Consumer staples and healthcare companies dominate the portfolio, accounting for about 52%, while technology makes up only 19%. This composition sets it apart from many tech-heavy funds in the current market.

And that’s it!

Remember, this focused exclusively on ISA investors in the UK using Fidelity as their broker.

There will be lots of differences between brokers — and even on Fidelity, the list was slightly different for SIPP investors.

Within SIPPs, two additional money market funds were in the 10 most popular investments. The Fidelity Cash Fund remained as the second most popular investment, while the Royal London Short Term Money Market Fund and Legal & General’s Cash Trust came in fifth and seventh respectively.

The Legal & General UK Index Trust and Fundsmith Equity fund were not in the 10 most popular SIPP investments, while the Jupiter India Fund dropped from sixth to tenth in terms of popularity.

Overall, ISA investors seemed to place a higher emphasis on equity investments. SIPP investors were slightly more conservative, possibly indicating a preference for lower risk within their pension pots.

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