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THOSE companies hardest hit by the Covid-19 outbreak have sprung back into life since the start of the year, as restrictions have eased and economies have revived. However, investors on Fidelity’s personal investing platform aren’t seduced. The top five best-selling funds suggest they want reliable growth, rather than to take any risks on an insecure recovery.
At the launch of the Fundsmith Equity Fund, Terry Smith vowed to run “the best fund there has ever been”.1 Perhaps more astonishing is that he has almost lived up to this bold claim. The fund’s focus on high quality companies that deliver a high return on capital employed – a measure of how successfully they spend the money that comes into the business – has been in tune with the market mood and the fund has performed strongly.
At the start of the year, it looked like the Fundsmith Equity Fund’s Smith’s run of performance might finally draw to a close. The Covid laggards that led the market higher, such as leisure, retail or restaurants, don’t feature significantly in the portfolio. The fund is also significantly weighted to the US, which temporarily fell out of favour. This was only a short-term concern for Smith’s many fans. By the middle of the year, worries over rising case numbers, inflation and higher interest rates had dampened enthusiasm for recovery names, allowing...
Read Full Story: https://www.fidelity.co.uk/markets-insights/investing-ideas/funds/what-were-investors-buying-august-2021
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