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Fundsmith Equity and key trends among most-popular funds · On The Money

• 0:03
  Kyle Caldwell: Hello, and welcome to the latest episode of on the money, which is a weekly look how to make the most out of your savings and investments. Before we go any further, I just wanted to flag that next week's podcast episode will be a day later than usual. So the episode is gonna analyze the personal finance measures announced in the budget. And to be totally honest, I feel the episode will benefit from not rushing it out and having a bit more time to analyze the contents of the famous red briefcase. So that episode will be published on the Friday, November 28, and I'll be joined by I i's personal finance editor, Craig Rickman, to provide his expert analysis.
• 0:46
  Today, we're gonna be looking at how investors favor funds have changed in 2025, and I'm delighted to be joined by II's newest recruit who is Dave Baxter. You may be familiar with Dave, particularly if you are a subscriber to the Investors Chronicle, as Dave has been the fund's editor of Investors Chronicle for many years until he recently joined I I. Dave, thanks for coming on the podcast.
• 1:15
  Dave Baxter: Thank you very much for having me.
• 1:17
  Kyle Caldwell: So, Dave, we're gonna be covering today the II top 50 funds index. So this is a quarterly report in which we rank the most of our funds, investment trusts, and ETFs. Essentially, it's a big league table that indicates what is popular with retail investors at the moment. I'm gonna be talking about some of the key trends within that index. The first thing we're gonna cover, Dave, which stands out is the funds with equity is no longer in the II top 50 fund index.
• 1:50
  So it's been in the index since we started it, which was in the summer of last year. However, it is no longer in the index. Why do you think, Dave, that funds with equity has become less popular with retail investors?
• 2:06
  Dave Baxter: So I guess the main guess would be, one word, performance. Perhaps with caveats as we'll get into it, long term performance has been good, and you've still made gains from holding funds with equity. But if you look at recent years, since 2021, it's basically underperformed the MSCI World Index for every single account of the year. It looks unless things change dramatically in the next few weeks, it looks like we'll see that again in 2025. So my assumption would be that people have simply been, you know, looking elsewhere, either thinking, you know, I'll just buy a global tracker or even going for some different active funds.
• 2:45
  It is worth noting, obviously, it's been difficult for an active fund in recent years to even keep pace with the MSCI index for reasons that we'll discuss. But if you now look on a five year stretch, it sits in the fourth quartile of the investment association's global fund sector. So and I guess just to touch on the reasons behind that underperformance, Terry Smith has been very open about this in recent years. The obvious one is the classic, you know, lament of the active manager. The MSCI World indexes choco block with those so called mag seven stocks, the kind of big tech names.
• 3:25
  And, you know, for diversification purposes and just out of preference, Terry hasn't had as much in them. He hasn't held NVIDIA. He does have a big Microsoft position. He has made a lot of money off Meta, but he's not as heavily, you know, in there as a tracker fund will be. A couple of other points just worth briefly mentioning.
• 3:48
  One is there have been points in the last five years or so when, you know, so called value stocks have done well, and Fundsmith hasn't held those. So in 2021, you had a bit of a a comeback, and they weren't able to kind of capture that upswing. And finally, there's a bit of stock specific trouble in the form of Novo Nordisk. It was a very popular stock, a real market darling, and Fundsmith did have a lot of exposure there. But I was looking just before we started recording, and over twelve months, it's down something like 60% because it's had various missteps.
• 4:24
  Kyle Caldwell: You just mentioned Novo Nordisk. Teddy Smith, in his half yearly letter to investors, we write two letters a year, which the vast majority of managers don't do. So I think it's refreshing that he writes these letters and that he is pretty transparent in terms of giving investment commentary and explaining why the fund has underperformed if it has underperformed. So for the first half of this year, he mentioned that Novo Nordisk was one of the main reasons why the fund had underperformed versus the MSCI World Index. And my understanding is that, as you mentioned, Dave, from its peak, which was around last summer, the share prices fell about 60%.
• 5:06
  And my understanding is that's because it's lost some ground to its main competitor called Eli Lilly. And the fact is that it was first to market with one of its weight loss drugs that gave investors a lot of excitement. It caused the share price to go up a lot. The valuation went up a lot, and there's been sort of, like, a natural correction due to the fact that the share price had that strong run and the valuation became pretty expensive. You also touched on the magnificent seven.
• 5:35
  On a five year view, that has been a big headwind for funds with equity. It's also been a big headwind for a lot of actively managed global funds. The MSCI World Index has been a very hard index to beat over the over the past five years due to the fact that how concentrated the returns have been in in a handful of the biggest technology stocks, which are listed on The US stock market. In in terms of performance, you mentioned the fund has fallen into the fourth quartile of its sector, which is the investment association global sector. Just to put some figures on that.
• 6:12
  So funds with equity over five years, it's retained 33.8 versus 54.9% for the average global funds. For that sector, there's there's a couple of 100 funds. The majority of them are actively managed funds, but there will be some index funds within that sector as well. But as you say, Dave, if you if you bought the funds at launch and you've held on throughout, you've done very well. It's outperformed since launch.
• 6:42
  So since 2010, the funds are up 14% on an annualized basis, and that compares to 12.4% on an annualized basis for the MSCI World Index. But over the past couple of years, that gap has certainly narrows due to its performance lagging over shorter term time periods. And and when I say shorter term time periods, I do think five years now. It's it is a a time period that may be concerning for investors. That's not necessarily a short amount of time.
• 7:16
  It five years is seen as a very good measure to analyze fund performance due to the fact that in that in that time period, you're you're gonna get both rising and falling markets.
• 7:27
  Dave Baxter: Difficult, isn't it? Because with in particular, with kind of active funds, you think, you know, these things can be a bit cyclical. You can go in and out of favor. And sometimes you do need to just exercise that patience and think, you know, I believe in the process. They're still being consistent with how they operate, but it's very psychologically understandable if you're now heading the point where you're thinking, oh, okay.
• 7:50
  It's been five years. And as you say, that gap is sort getting bigger and bigger.
• 7:55
  Kyle Caldwell: In terms of its fund size, there's been lots of articles written over the years about how big the fund is and whether this means that the full manager, of course, Teddy Smith, is constrained by that size. What are your thoughts, Dave? I mean, I I assume if you're hope if you're still holding the fund and you're hoping for a recovery to play out due to its sheer size, it's not gonna go down the market cap spectrum and have lots of mid caps and small caps. It simply cannot do that. But then again, on the other hand, wouldn't expect the fund to do that.
• 8:28
  It it does invest in really big companies, it's not gonna change. It it's gonna stick to its knitting, and its investment process is gonna stay the same anyway.
• 8:38
  Dave Baxter: Yeah. It's interesting because shouldn't really struggle with liquidity because as you said, it invests in these behemoth companies. I was looking at the October, and its median market cap of a holding is nearly £104,000,000,000, I believe. So you're not gonna have huge trouble sort of buying and selling. However, as you mentioned, you can't necessarily buy some companies that will drive some growth.
• 9:04
  And if you look back to his earlier years or the fund's earlier years, there were holdings like, you know, Domino's Pizza is one. I think you've mentioned before that they did hold at some point, generated some quite nice returns. But now owing to the sheer size of the fund, they just won't be able to hold that. So you are potentially having to go for companies that have less in the way of kind of exciting and rapid growth, which could have an impact. Although I suppose one strange silver lining of the kind of outflows is that the fund is it's huge, but it's not as huge as it was.
• 9:39
  So it's around 17,000,000,000 in size now. And you think at its peak, was at least over 25,000,000,000. So bizarrely, maybe one of those problems is slightly kind of less of a problem than it was before.
• 9:53
  Kyle Caldwell: So we asked some of our customers for their views on funds with equity, And we did this on our new well, say new. It's been going for a while now. We bought our I I community app. So for those that are not familiar, I community, it's a social trading network in which you can connect with investors, talk about your investments, and see how your portfolio compares to others. So it's free for II customers, so do check it out and please do get involved.
• 10:21
  So I asked those on the II community, of which there are now over 30,000 members, what their views are on funds with equity and whether they've been holding or selling, whether they've made any changes. There's lots of great interaction. There was 58 comments to the post. And in the main, most people who responded said that they'd either completely sold out or they now had a small holding in front of equity, and that's on the back of its performance in recent years underperforming the MSCI World Index. There didn't seem to be much optimism in terms of them expecting performance to turn around.
• 11:04
  And some of the people that commented were comparing comparing Fund Smith's fee with a low cost tracker funds and saying, well, at the end of the day, if you if you bought an index fund or an ETF, then you've you've you've performed much better over that five year period.
• 11:22
  Dave Baxter: The fee is an interesting point, isn't it? Because somewhere around the 1% mark, which is even a bit pricey for kind of an active fund, and they've never really brought the fee down even as the fund has grown, which even when performance was really fantastic, that was a bit of a bone of contention among investors.
• 11:41
  Kyle Caldwell: Completely agree, Zayv. And I I do think it's a shame that, overall, the fund industry doesn't typically pass on economies of scale. You do see it with investment trusts. When investment trusts reach a certain size or threshold, there's a tendency to lower the annual management fee. But I just don't I just don't think that happens that much with open ended funds.
• 12:04
  And I'd love to see that happen more often because at the end of day, I think if you can pass on economies of scale, if it's cheaper to run as you've got more assets, then it'd be great if you could pass that on to the underlying investments in the form of a lower fee.
• 12:17
  Dave Baxter: Agreed. Agreed. I I think at the end of day, performance is still the main thing, but it's, yeah, it's kind of the goodwill, isn't it? And if you are like I said, if it's cheaper to run a fund, then pass it on.
• 12:28
  Kyle Caldwell: Some of the customers who responded to the post on our II community app pointed out that they had replaced Teddy Smith with a global index fund or a global ETF. One thing I'd say on that is that whatever investments you have, think I it's really important that you have a diversified portfolio and that every single fund you own, whether it's an actively managed fund or you simply own in the market through an index fund or an ETF, that they're all bringing something different to the party, and they are adding something to the portfolio, and you're not duplicating too much in terms of fund style and the underlying holdings as well. I do think if you own a global index fund or a global ETF, funds with equity, it's very different from the wider market. If it wasn't very different, then it wouldn't have underperformed over this five year period years. However, there are lots of other options as well.
• 13:23
  There's lots of competition among active funds that are that can provide an alternative and complementary exposure to a global index fund or a global ETF. And within the comments on the II community post, a couple of of actively managed funds that were mentioned that investors said they had switched into where Randmore Equity, Blue Whale Growth, and Scottish Mortgage. I I think you can certainly say with that trio as well as funds with equity, they all are very different from the wider global stock market.
• 13:58
  Dave Baxter: Yeah. I I'd definitely agree with that. I think also, particularly, something I've really noticed in recent years is I mean, this has been narrowing down slightly to the investment trust space. But if you look at the kind of the global sector there, you have all these quite interesting funds. You you mentioned Scottish Mortgage, very distinctive kind of future trends.
• 14:17
  You have AVI Global that kind of does a slightly activisty value focused approach and just lots of stuff that is at least different from the index. Although, like you say, that will mean kind of underperformance when everything is just kind of running ahead with these few stocks.
• 14:34
  Kyle Caldwell: Before we move on from Thunsmith, I think it'd be an oversight if we didn't mention the recent announcement from Smithson Investment Trust. So this is a global smaller companies, global mid cap portfolio that was launched several years ago. At the time when it was launched, it was the largest investment trust IPO in The UK, and that remains the case today. There hasn't been a it hasn't been an investment trust launch to raise more money since then. So, Dave, could you run through the details?
• 15:06
  So I'll kick off by saying it's proposing to turn into an open ended fund. And if you disagree and you don't want the fund to turn into an open ended funds, then you can get your capital back close to net asset value. And one of the main reasons why they're proposing to move to this open ended fund structure is because it's traded on a wide discount for a number of years now, but also as an activist investor on a shareholder register called Saba Capital, who I assume have been applying some pressure in regards to that discount.
• 15:41
  Dave Baxter: Yeah. I think this is really a Saba story because it's only a few weeks ago that it was you know, as we recently wrote, Saba has been targeting lots of investment trusts in the last eighteen months, two years, but they do basically have to tell the market if they have a position that exceeds 5% of a a trust or a company. And it was only, yeah, a handful of weeks ago that it came out that they had quite a big position in Smithson. And when Smithson made the announcements this week, they mentioned the fact that I think Saba has something like 16%. Saba has previously kind of pushed trusts such as recently Middlefield Canadian Income to move into other structures.
• 16:26
  And what's happening here is, as you mentioned, you have that discount, so your shares are in theory trading at kind of a lower value to the underlying assets. But if you kind of shunt it into an open ended structure or an ETF structure, investors, including Saba, can then simply get out an NAV and kind of make a a profit at least versus that discount. So it's kind of yeah. It's an interesting sign of obviously, some people don't really agree with what Saba is doing, but it is producing some results.
• 16:55
  Kyle Caldwell: And in terms of the investment structure, actually, interviewed Simon Barnard, full manager of the Smithson Investment Trust. And those that didn't see it or would like to watch it, you can view that on Interact Investors YouTube channel. I asked them the question regarding why Smithson in an investment trust structure. Like, what what what what is the structure giving you over an open end of funds? Since Smithson launched, it's not used any gearing, and that is one of the key tools that an investment trust has.
• 17:29
  Asked him in respect of, does the investment trust does the structure of having a fixed pool of assets? Does that mean that it's easier for you to own smaller companies? But the answer he gave was that it doesn't feel like he's being constrained in any way. He feels like he's getting enough liquidity. And I'm sure that that was a lot of the thinking behind moving to an open end of funds.
• 17:52
  Can we run the strategy in the same way? Can we get the same levels of liquidity? When I say liquidity, how easy it is to buy and sell smaller companies and mid cap companies that the portfolio invests in through an open ended format? And it seems to be he said that that is the case. So I think as as you've as you've outlined, Dave, that this this move that's being proposed, it has been done in light of the activist investor, and it's to eliminate the discounts.
• 18:22
  I think it'll be if it goes ahead, gonna be really interesting to see how the fund size changes as along with Saba, you know, investors can take a view the you know, if they've been unhappy with the performance, then they can, you know, they can pull their money out to close to net asset value rather than sitting on a discount of over 10% at the moment.
• 18:42
  Dave Baxter: It's interesting, isn't it? Yeah. Because you think they're not gonna miss out on some of the advantages of trusts. You mentioned gearing. They don't have enormous position sizes based on kind of recent disclosures, so they're not gonna have problems with some of the diversification rules and open ended funds.
• 19:01
  And, yeah, obviously, when we talk about small and mid caps, if they're global small and mid caps, they're still big companies. The one thing I do wonder is, obviously, if you're a trust and you're unpopular, you can be plagued by a discount, and that creates pressure. But if you're an open ended fund and you're unpopular, then people will just drag their money out. So if they remain unpopular and they're in that structure, they may have a bit of a headache with trying to kind of create liquidity and just with the fund shrinking, and we'll see how that goes if that's the case.
• 19:31
  Kyle Caldwell: Let's now move on to another fund that has been popular with Interactive Investor customers for the past couple of years, but it's become less popular this year, which is Jupiter India. So within our II top 50 index, a year ago, it was seventh overall. It's now not even in the top 50. What are the main reasons for you, Dave, as as to why that fund is not as popular as it once was?
• 19:56
  Dave Baxter: I think it's probably just a victim of the market of fishes and falling out of favor. So a lot of this can be explained by looking at the performance figures. At the time of recording, that fund was sitting on, I think, a five year return of 169%, so, you know, big return. But if you look at a twelve month return, it's on 4%. So the the performance has come off a bit.
• 20:20
  And, basically, I suppose with India, it was quite like a market darling of emerging markets in recent years, and that was helped by China being out of favor. But investors seem to have just kind of turned away from that market. It's partly, I believe maybe it's a victim of its own success because people started to get concerned about prices being too high. And even if you look now, they do look quite high. For example, you know, I recently looked at ETFs operating in Asia, and you can see the price earnings ratios in those.
• 20:55
  And the one on the India ETF is something like 25.5 times at the October, and that's just much higher. I think the China one, for example, is somewhere around the 16 mark. So it's still looking quite expensive. So maybe people are just kind of taking a step back, taking some profits, and putting in that money elsewhere.
• 21:16
  Kyle Caldwell: I often find with some resell investors that India and China are pitted against each other. And that some investors, they like to have single country exposure to those regions. And as you've mentioned, Dave, I think the fact that China has been out of favor for the past five years, its valuation is cheaper than India. So I think some money is rotated into China and out of India. And within our II top 50 index for the third quarter, we saw Fidelity China special situations enter the index.
• 21:47
  It was one of 10 new entrants, and that's part of that trend. Let's now move on to what's not changed in terms of the most popular funds among our customers. So global strategies continue to be really popular with our customers. So within the II top 50 index, 17 of the 50 invest globally. Around two thirds of that 17 are index funds or ETFs.
• 22:16
  So many investors are deciding, I just wanna simply own the market through an index fund or an ETF rather than try and beat it through a professional stock picker who, of course, may outperform, but they may also underperform, and they may also heavily underperform. I think that's one of the for me, that's one of the key attractions with an index fund or an ETF is as well as knowing what you're gonna get on the tin, you also know you're not gonna drastically underperform. It takes away that risk. What what are your thoughts, Dave, on investors continuing to seek out global exposure? It's, of course, been a strong period for the global stock market.
• 22:59
  You know, whatever time frame you look at, five, ten, fifteen years.
• 23:03
  Dave Baxter: Yeah. I think it's really interesting. I think you summed it up well. It's kind of does what well, okay. Seemingly does what it says in the tin.
• 23:09
  It's a simple thing. You're maybe getting, like, a very broad take on markets, But I do wonder whether people, you know, have realized that this is a widely discussed thing, but have realized whether, you know, global funds are often less global than you actually think given, say, MSCI World is something like, what, 72% in in euro shares. So I don't know. There might be a risk now that some investors are getting too exposed to kind of one theme, to one handful of stocks, and and one market. And maybe they need to obviously, in the index, there are some kind of more nuanced funds and more nuanced, maybe less US heavy takes on kind of global markets.
• 23:55
  But, yeah, some investors might still be kind of betting too big on, like, a few things.
• 24:00
  Kyle Caldwell: An interesting trend we have seen is US focused funds become less popular. So in the fourth quarter last year, there were 10 US funds in our II top 50 fund index. There are now only four. And the all of them that have that are no longer in the index, they were tracker funds through the the index fund or ETFs that were tracking up and down fortunes of a part of The US stock market. Investors were getting exposure to the S and P five hundreds, but there was also demands for the technology Nasdaq index.
• 24:37
  So I do think that some investors become more conscious about US valuations, potentially the risk of a Donald Trump presidency, but also the fact that, as you've just mentioned, Dave, if you already have global exposure, particularly if you're already investing in global index funds or global ETFs, you've already got a very large portion of your money in The US stock market anyway. So there's a danger that you might duplicate.
• 25:05
  Dave Baxter: Yeah. I think that's becoming an even bigger problem, actually. I believe in the last year, we reached a peak in terms of the, I suppose, weighting The US has in the MSCI World Index, so that risk is even greater than it was just a few years ago.
• 25:20
  Kyle Caldwell: For investors that are concerned about the concentration risk within The US stock market, there are various ways to lower that risk. You wrote a recent article, Dave, in which you outlined some of the options. Could you summarize those?
• 25:36
  Dave Baxter: Yeah. There are some really interesting, weird, and wonderful options out there. So you've got, for example, equal weight funds. So you can take an index like the MSCI World, also the S and P 500. And rather than doing market cap weighting, so, you know, having Nvidia on a big weight, you would simply give roughly the same amount to every single stock.
• 25:56
  So in theory, you've got less well, you do have less riding on those big stocks, but the criticism is that you might end up suffering if the market falls anyway. And when times are good, you might miss out on those big returns. And one other option worth mentioning I mean, there are many US options, but one global option worth mentioning that's interesting is there's an MSCI World x or a few MSCI World x USA ETFs. So they just pull The USA out of the index. And that does mean that you have some pretty chunky weightings to the other markets.
• 26:28
  Japan is on the big weighting, for example. UK is on the big weighting, and there's a smattering of, like, decent allocations to European markets. But I guess you could hold that, and then you could hold a a US tracker on a smaller weighting and just have a bit more of a kind of nuanced approach.
• 26:45
  Kyle Caldwell: As I mentioned earlier, I think with an actively managed fund, it's really important to look under the bonnet, understand its strategy, and then look at it and think, how is this different from the index, and is it sufficiently different from the index? Will it potentially give me outperformance over time? We've seen this year increased demand for value focused funds, which are, in the vast majority of cases, very different from the wider market. So in terms of global value funds that we've seen increased demand for, they include Randmore Global Equity and Artemis Global Income. And then within The UK, we've seen UK value funds like Temple Bar and Fidelity Special Values, which are both investment trusts, become more popular with our customers this year.
• 27:36
  What are your thoughts on this trend, Dave? Does this potentially speak to the fact that some investors are are looking to diversify their exposure a bit more, especially given how strong global stock markets have performed in recent years?
• 27:49
  Dave Baxter: Yeah. I think there's a couple of things. I think one factor might be, yeah, investor awareness. As you mentioned, classic growth stocks have run really hard. There are concerns about valuations.
• 28:02
  Points, we've briefly seen what can happen when those stocks sell off. It can be quite painful. I suppose on the other hand, it's simply also that those funds have done really well in terms of performance, the value funds. I believe Temple Bar this year is very comfortably ahead of the competition in The UK, and The UK market is generally doing very well. Ranmore is very interesting.
• 28:24
  It's performed very well. Artemis Global Income as well. So and that might be down to things like, you know, classic value sectors like financials having a really good recovery in recent times. So maybe people are just noticing that there are other ways to make strong returns rather than simply buying your global tracker or going for these big growthy funds.
• 28:44
  Kyle Caldwell: And with value funds, they're, of course, hunting for potentially mispriced opportunities, and they're hoping that over time, those low share prices will recover. But, again, it's important to look onto the bonus and understand how the value for manager is investing and what are the key qualities and attributes they're looking for in a company. They're typically looking for some sort of positive change, like a a new management change, for example, or the business pivoting into a different area, such as a different type of product or different type of service. So, again, it's it's important to do your own research, look under the bonnet, and, as ever, understand what you're buying. We're gonna conclude by talking about the last trend that we've been seeing, and we've been seeing this trend play out more of late, and that is the increased demand for commodity focused funds.
• 29:39
  In particular, we've been seeing stronger demands for gold, ETCs, exchange traded commodities, and also silver ETCs. What are your thoughts, Dave, that trend? It's, of course, been a strong run up in terms of the spot prices of both gold and silver this year and also before that as well. I think gold has a really strong run over the two years. What are your thoughts in terms of investors buying at this point?
• 30:10
  Dave Baxter: So you can definitely call me too cautious or too bearish or too scared, but I do when something runs that hard and when you see these enormous gains and all these record highs, I do start to think, is it a bit kind of risky to buy in? And maybe if you if you can't resist, if you have the kind of investment FOMO or you think it's gonna go even further, then perhaps you just need to be careful and kind of have, you know, smaller allocations. Don't put too much money into it. And just remember the general, you know, not very exciting, but very important kind of diversification principles of holding other things alongside it. I suppose it's also interesting.
• 30:53
  There'll be lots of people who have been holding for, you know, this year and have made these huge gains either on the metals or, you know, the mining chairs have done incredibly well, haven't they? So in those cases, you might want to think about kind of taking some profits and reallocating elsewhere. That is difficult because, you know, many, many markets have done very well this year, so not lots of things are obviously cheap. But some of those rules of thumb might be able to kind of give you a steadier ride over time.
• 31:22
  Kyle Caldwell: Completely agree. Position sizing is very important. In terms of position sizing, I mean, there's a number of wealth preservation investment trusts, the likes of Ruffer Investment Company and Personal Assets, and RIT Capital Partners as well. And, you know, over the years, I've seen that their exposure to gold, it typically fluctuates between five to 15% maximum. Obviously, we can't give any financial advice or regarding how much to invest in gold, but I think it's safe to say that, you know, very high risk assets, which gold does fit into, is volatile over time, then you need to position size accordingly and not hold too much of your portfolio in that one particular area.
• 32:06
  Dave Baxter: And, also, it's just worth remembering why you're gonna hold it because, I guess, classically, people have thought it's a safe haven. You're gonna have some gold in case kind of markets fall over. But now do you think people are maybe just seeing it as more of a, oh, the price is doing really strongly, so it's momentum play. And I guess you just need to consider what role is it gonna play.
• 32:25
  Kyle Caldwell: Because in terms of the sort of defenders in a portfolio, the ultimate defender is cash. And we've seen over the past couple of years, obviously, interest rates rose from rock bottom levels to peak at 5.25%. They've since been falling, but, you know, interest rates are still at a high level compared to what they have been up for the last fifteen years. And at the moment, you can still get around 4% on a money market funds, which at the moment, that's slightly beaten inflation. So in terms of looking for defensive areas, you know, we've we've continued to see the Royal London short term money market funds be really popular with our customers.
• 33:04
  It's number one on our II top 50 fund index. Well, suppose going forwards, the attractions of money market funds, they're gonna be dictated by how low interest rates go because the yields that money market funds offer, obviously, the income, that's not guarantees, but it it generally is in line with the base rate.
• 33:27
  Dave Baxter: I think what fascinates me here is, you know, do you think the allure of those cash funds is gonna go away and what will drive that because, yes, if well, as and when interest rates fall further, the rate will get less attractive on that particular fund. But then, I don't know, are people also sticking with it because there's so much uncertainty? Because I would partly think this year, equity markets have done such big returns that you might be slightly drawn in and away from cash, but people are still kind of opting for that cash approach.
• 34:00
  Kyle Caldwell: Dave, thanks for your time today.
• 34:02
  Dave Baxter: Thank you very much.
• 34:04
  Kyle Caldwell: So that's it for our latest episodes. Hope you've enjoyed it. You can let us know what you think. You can comment on your preferred podcast app. And if you get a chance, please do leave us a review or a rating.
• 34:15
  Those reviews and ratings are really important to improve the visibility of the podcast and to get the podcast into more ears and grow it. In the meantime, you can check out more information and practical pointers on the Interactive Investor website, which is ii.co.uk. And I'll see you next week on a different day of Friday rather than Thursday, and I'll see you then.