It appears investors have a healthy long-term appetite as many of the most popular funds over the past month are ‘acc’ versions. These are types of funds that automatically reinvest investors’ income instead of distributing it as cash dividends.

Nine out of the 10 best selling funds on AJ Bell Youinvest’s platform over the past four weeks are ‘acc’ versions.

Reinvesting dividends can significantly enhance your returns over time, as we discuss in this article.

The favourite fund among AJ Bell Youinvest customers making investments over the past month has been Fundsmith Equity I Acc which invests in equities on a global basis in the long-term.

It puts money into high-quality businesses that can sustain a high return on capital employed with advantages that are difficult to copy.

Its top 10 holdings include tech colossus Microsoft, Holiday Inn owner Intercontinental Hotels and Pepsico.

DIVIDEND GROWTH SEEKER

CF Woodford Equity Income Fund C Sterling Acc is second best selling fund on the AJ Bell Youinvest platform. It focuses on delivering attractive long-term returns by investing in companies that can provide sustainable dividend growth.

Managed by Neil Woodford, the fund includes positions in the pharmaceutical sector, including GlaxoSmithKline, AbbVie and Spire Healthcare.

It also has cigarette makers Imperial Brands and British American Tobacco.

PASSIVE INVESTING

Vanguard LifeStrategy 80% Equity A seeks to return capital by investing in passive, index-tracking collective investment schemes.

Over two fifths of its portfolio is focused on the US, while 23% is concentrated on UK stocks.

CONTRARIAN FUND

Jupiter India I Acc is the fifth best selling fund on the list. It is perhaps for more adventurous investors as it is interested in companies that operate or reside in India, instead of a UK or global approach.

If you want some ideas for investment trusts to buy specifically for a dividend reinvestment strategy, take a read of our latest article looking at trusts with the longest track record of dividend growth.


Issue Date: 17 Mar 2017