HL investors return to old favourites in Q3

Investors returned to global and US markets in Q3, favouring low-cost passive funds over active strategies. Hargreaves Lansdown data shows a clear tilt toward broad market exposure, with Artemis Global Income standing out as the only active fund among the most popular ISA picks.

Joseph Hill, senior investment analyst, Hargreaves Lansdown:

“The risk-on sentiment following the Liberation Day losses back in April has continued, with US tariff uncertainty reducing over Q3, providing a tailwind for US and Global stock markets, many of which have hit new all-time highs over the quarter. The AI theme also continues to dominate market returns, with share prices of the big tech players in this space rising further.

In this environment, it’s no surprise that Q3 saw HL investors return to old favourites, with funds with a global, US or technology focus dominating the most popular choices across different ISA accounts. The trend towards passive investing also continued, with 9 of the top 10 funds bought by HL clients in Stocks & Shares ISAs, Junior ISAs and Lifetime ISAs being passive. The low fees associated with passive funds continue to prove attractive to retail investors purely looking for broad market returns.

Artemis Global Income was the sole active fund to feature in the most popular funds with HL clients in Q3 across the different types of ISA accounts. 

Managed by Jacob De Tusch Lec, the fund has a contrarian approach with a focus on undervalued companies. Income is generated through a variety of sources, from more mature steady companies to lower quality, higher yielding companies. The fund is significantly underweight in the US market, with around a third of its assets invested in US listed companies, compared with around two thirds for its benchmark. This different approach to investing in global stock markets has meant that the fund has performed exceptionally compared to most benchmarks year to date. With the AI theme potentially approaching bubble territory, investing in this fund as a diversifier within a broader portfolio could be beneficial should the bubble burst. 

The only fund without a US, global or technology focus to feature was the Legal & General European index fund, which provides broad exposure to larger European companies, excluding the UK. The fund fully replicates its index, investing across sectors like financials, industrials and health care. Investing in European shares is one way to diversify an investment portfolio focused on the US.”  

HL data