December's 10 most-bought funds

Neil Woodford's first eponymous open-ended fund, CF Woodford Equity Income, was the most-bought fund on the Interactive Investor platform in December, having held onto the top spot since its launch in June 2014.

Investors have been rewarded for their faith in the star manager, with the fund returning 15.1% over one year to 24 December, making it the fourth best performer in the Investment Association's (IA's) 82-fund-strong UK equity income sector over the period.

The fund launched with a record-breaking £1.6 billion of assets under management; however since then it has grown to £8.1 billion, making it the largest fund in the sector.

Also holding onto its place in the top table is Fundsmith Equity, one of our sister magazine Money Observer's prestigious Rated Funds, which was the second most-bought fund in December.

Climbers

Managed by contrarian investor Terry Smith, the global equity fund has returned 12.3% over one year and 70.1% over three years to 24 December, making it the fourth and sixth best-performing fund in the 258 fund-large global sector over the respective time periods.

MFM Slater Growth climbed an impressive five places to be the third most-bought fund in December after re-entering the top 10 in October following a 10-month absence.

Managed by Mark Slater since its launch in 2005, the fund is the best performer in the UK all companies sector - the IA's largest at 276 funds - over three years, and has put in a first-quartile performance over all other time periods.

Money Observer Rated Fund Lindsell Train Global Equity climbed one place from November to be the fourth most-bought fund in December.

Managed by Michael Lindsell since its launch in March 2011, the fund has performed well, although it has fallen slightly behind over the past three and one months with returns of 5.55% and -1.3% respectively.

Money Observer Rated Funds Artemis Global Income and Axa Framlington Biotech were the fifth and sixth most-bought funds in December respectively, with the former climbing one place since November and the latter falling three places since last month.

Passive index tracking funds Vanguard LifeStrategy 80% Equity and Vanguard LifeStrategy 100% Equity were the seventh and ninth most-bought funds respectively.

The popularity of passive funds continues to dwindle among Interactive Investor clients following a record-breaking month in September when five index trackers made the top 10 most-bought list.

Long time no see

Two Money Observer Rated Funds re-entered at the bottom of the most-bought table in December after long periods of absence.

The first is UK smaller companies fund Marlborough UK Micro Cap Growth, which was the eighth most-bought fund in December, making its first appearance in the list since November 2014.

Managed by small and micro-cap specialist Giles Hargreave, the fund is a strong long-term performer, delivering the best returns of any fund in the UK smaller companies sector over 10 years to 24 December - 289% compared to 135.3% from the average UK smaller companies fund.

Legg Mason IF Japan Equity was the 10th most-bought fund in December, making its first appearance in the table since December 2013.

The fund is the best performer in the Japan sector over one, three and five years to 24 December, with impressive returns of 49%, 132.3% and 233.4% respectively.

This compares to 13.8%, 45.8% and 32.6% from the average Japan fund over the same time periods.

Legg Mason IF Japan Equity has been managed by Hideo Shiozumi since its launch in 1996. The veteran investor focuses on companies of the "new Japan", or those outside of the traditional manufacturing sectors, that cater to Japan's domestic economy, such as healthcare or internet firms.

The fund's highly concentrated, smaller company-oriented portfolio makes it notoriously volatile, regularly swinging from large gains in one year to steep losses in another.

For example, the fund gained nearly 70% in 2005, only to shed 51.2% in 2006. However, the fund has enjoyed relatively solid gains since 2010.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.