Andy Parsons, head of investment research at The Share Centre, examines the top funds purchased by our customers in January 2012.
1.Legg Mason Japan Equity fund
2.Legal & General UK Index fund
3.Invesco Perpetual High Income fund
4.Jupiter Global Managed fund
5.First State Latin America fund
6.Aberdeen Emerging Markets fund
7.Fidelity Enhanced Income fund
8.Marlborough UK Micro-Cap Growth fund
9.M&G Optimal Income fund
10.Invesco Perpetual High Income fund
"Markets started 2012 with their usual New Year optimism, firmly aided by the continuing raft of positive economic data from the US, but more importantly the reassurance provided by the LTRO measures afforded by the European Central Bank. Whilst these measures will not resolve the deep rooted issues within Europe, they do bring respite and buy time for the political forces to continue negotiations and formulate plans for the longer term future of the region.
"Our top ten purchased funds show that investor appetite remains varied. A collection of investors are clearly still seeking income, potentially to help supplement their lifestyles. Where as others demonstrate a belief that global and emerging market opportunities help provide real diversification to their portfolios.
"For the second month in a row, the top position was taken by the Legg Mason Japan Equity fund. The region has continued to recover well from the devastation of the earthquake and subsequent tsunami in March 2011. The vast majority of supply chains are now back on track, and global operations for all those businesses affected appear to have recovered. All that said, investment within this region remains for higher risk investors.
"Also retaining its position was the Legal & General UK Index tracker fund. This fund is the default investment option for child trust fund vouchers invested via The Share Centre where a fund was not chosen so will feature on this list for the foreseeable future.
"In third place was the accumulation class of the Invesco Perpetual High Income fund. Neil Woodford has always backed his convictions and his long held views over the state of the UK economy and opportunities afforded by many of the more perceived defensively aligned large core UK blue chips came to fruition in 2011, as the fund finished the year ranked number one within its sector.
"In fourth place, the Jupiter Global Managed fund saw a change in lead manager towards the end of 2011 as Simon Somerville took over the daily reigns. In fifth place, the First State Latin America fund offers investors not only exposure to a region of the world rich in both hard and soft commodities, but also to a growing internal consumer demand as lifestyles change and improve. And in sixth place, the Aberdeen Emerging Markets fund offers investors broad diversity to the continual story of the emerging economies, albeit it has recently been announced that due to the success of this fund, it is regrettably being soft closed to restrict monetary inflows.
"The next two funds clearly demonstrate the diversity in investor appetite. The Fidelity Enhanced Income fund is a new entrant to our preferred list of funds, the Platinum 120, offering investors the potential for an above average income yield through a two fold investment approach. The Marlborough UK Micro-Cap Growth fund seeks those investment opportunities at the very bottom end of the market cap spectrum with companies sized at less than £100m at purchase.
"The final two places were taken by the M&G Optimal Income fund, run by the highly experienced Richard Woolnough and the income class unit of the Invesco Perpetual High Income fund."
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