Best-selling funds, trusts, ETFs & shares of October 2022

Hi all,

With a slight nervousness about writing this the day before a Budget, which is not destined to be a Good News budget (#BritishUnderstatement), we’re pleased to share the bestseller lists across major platforms for October.

I was contacted this week by a broadsheet journalist wondering if these lists were a good idea. Do they help investors?

My take is that it depends on what sort of a market we’re in. If we’re in a ‘business as usual’ stable/gentle bull market with no dramatic shocks, and stock markets not appearing in the 10 o’clock news, then these lists can be a useful way to identify some mainstream funds which are rising with the tide and momentum is gently propelling forward. When markets are volatile and swinging around like crazy, then these rear-view mirrors are not so helpful.

For example, I was really struck to see the Royal London Short Term Money Market fund in the bestseller lists for October – I can’t remember the last time I saw a cash-like product in these lists. Returns have been about 1% over the last year. Not bad compared to global stock markets. But pretty damn bad compared to today’s inflation number of 11.1%! This pick is telling the Fear side of the story.

Scottish Mortgage Investment Trust is a very different story, also in the bestseller investment trusts lists. As at today, it is down 44% over a year. If you have long-term horizons, is it better to buy something at full price, or in a sale with 44% off (this is an example btw – not a recommendation or suggestion)? This pick is telling the Greed side of the story. Hope for what the future holds.

These lists tell me what I hear from fund managers in general. FOMU is rife. Fear Of Messing Up. People lack strong conviction about what to expect. So we’re sitting on the fence. Passive stuff. Cash. Main big global indices. We don’t want to get it wrong with lots of funky thematic or niche picks.

If we see markets head up a touch more, as they did last week in the States, then I’d expect to see a little more Greed return, and a little less Fear. At volatile times like this, the concept of ‘Pound Cost Averaging’ or drip-feeding into markets, feels like a pretty sensible approach to me.

As an ending note, I hosted a webinar last week with Invesco’s Head of ETF Equity and Commodity Product Management, Dr Chris Mellor, and Financial Life Planner and EQ Coach, Adrian Kidd. I thought it was a helpful, wide-ranging conversation about what’s going on and what to expect - we’ve also pulled out some shorter snippets here which might be a helpful watch.

Thanks all – hope you enjoy this month’s content. And let’s hope the Budget isn’t as dramatic as the last one!

Holly