Three of the most popular funds and trusts among AJ Bell Investors

Searching through the investment universe can often leave you feeling spoiled for choice. Even once you decide on a sector, geography or asset class, you’re faced with rounds of other decisions, and a long list of funds or investment trusts that might seem like they’re doing the same thing.

There’s not a ‘right’ choice in this situation, and the best-fit investment for you is largely dependent on your investing goals. But among AJ Bell’s DIY investors, there is a pool of names which feature widely across ISAs and pensions.

Individuals will have their own reasons why they’ve selected such names, potentially looking at performance, charges and convenience. We now take a closer look at three of the funds and trusts, to see what they have to offer and what role they might play in an investor’s portfolio.

Fidelity Index World

Some investors like to cover their bases for a variety of markets through investing in a global equity tracker fund. Rather than taking a bet on a particular country, a global tracker will spread your risks across multiple geographies, as well as offering diversified exposure to various industries.

Costs can be much lower than an equivalent actively managed fund. Fidelity Index World is what’s known as a passive fund because there isn’t a fund manager deciding what goes in and out of the portfolio. Instead, it is designed to mirror the performance of a basket of shares that belong to the MSCI World index. For example, if the MSCI World went up 10% in a year, so should Fidelity Index World minus the 0.12% annual charge build into the fund.

The MSCI World index provides exposure to approximately 1,400 companies across 23 different countries. By tracking this index, Fidelity Index World currently provides access to well-known names such as iPhone maker Apple, semiconductor group Nvidia and computers-to-gaming expert Microsoft, as well as some lesser-known companies.

Currently, the fund has nearly three quarters (72%) of its assets in the US, meaning it largely relies on the success of the region. But because of how the index works, if stocks in the US market started to become less popular, weightings would shift, and holdings from other markets would move in to make up a larger percentage of the index, and therefore the fund.

In the five years to 27 March 2025, the fund generated a 108% total return, according to Fe Fundinfo. Just remember that past performance isn’t a guide to future performance, and investments can go down as well as up in value.

JPMorgan Global Growth & Income

Historically, investors might have picked a growth fund if they wanted to build wealth during their working life and then they switched to an income fund during retirement.

Nowadays, people are typically living for longer, so they want their investments to keep growing in value during retirement. They also want to generate an income to pay the bills, which means demand has risen for investments that blend both attributes.

We’ve seen the rise of funds and investment trusts that aim to grow capital and pay a higher yield than you might find from a traditional growth fund. These tend to have ‘Growth’ and ‘Income’ in their product name.

It’s not just people in retirement holding these investments as analysis of AJ Bell’s customer holdings shows that younger people also own them. For example, someone in their 20s to 50s might take cash from dividend payments to buy more shares and benefit from compounding.

Investment trust JPMorgan Global Growth & Income positions itself as a global ‘best ideas’ stock portfolio, paying dividends quarterly. It doesn’t slice the portfolio into specific geographic regions, instead companies are selected for their merits rather than where their shares trade.

At the end of February 2025, approximately two thirds of the portfolio featured US-listed stocks, including retail-to-cloud computing giant Amazon, luxury goods group LVMH and semiconductor specialist TSMC. The rest of the portfolio was predominantly made up of names in Europe with a sprinkling of stocks across Asia.

Investors would have earned a 153% total return from JPMorgan Global Growth & Income over the five years to 27 March 2025, which factors in dividends and capital gains. In comparison, the MSCI World — a widely-used benchmark for global equities – has returned 108% in sterling terms, according to FE Fundinfo.

Royal London Short Term Money Market

Money market funds have caught the attention of investors seeking alternatives to cash. These funds typically invest in a mixture of cash and short-dated bonds, such as US Treasuries, and are positioned as lower-risk investments.

Between 2022 and 2024, many investors took advantage of the rapid rise in interest rates to save money in cash. For the first time in ages, they were able to get 4% to 5% interest on their savings.

With central banks now having started to cut rates, certain investors might be looking to redeploy cash if their savings rates are falling, hence why money market funds are getting on people’s radar.

Royal London Short Term Money Market aims to provide a regular income for investors and holds at least 80% of the fund in cash or cash equivalents. As of the end of January 2025, its largest positions included bonds issued by Santander and Cooperative Rabobank. It currently offers a 6.2% yield.

Investors should note that dividends from funds and trusts, or coupons from bonds, are not guaranteed to be paid. There is always the risk that dividends are cut or cancelled and bond issuers default on payments.