Where UK investors are putting their money: the most popular sectors

UK investors have billions of pounds committed to a wide variety of portfolios – but which sectors are proving to be the most popular? Do they prefer UK companies to multinational giants? Is there more tucked away in equity funds than bonds? Have certain areas become more attractive?

Here we take an in-depth look at the Investment Association sectors that have the most under management and suggest some funds worth considering.

What are IA sectors?

There are more than 4,000 funds available in the UK so the Investment Association splits them into around 50 sectors. Although every fund will have slightly different aims and approaches, dividing them up in this way enables investors to broadly compare like with like. Criteria for entry is clearly defined for each of these sectors, which are decided by asset class, industry, geography or overall objective.

Here we look at the 10 sectors with the most funds under management, according to the most recent data.

Funds under management table for January 2025*

Most popular: IA Global

The IA Global sector is comfortably the most popular sector with UK investors. In fact, it has £88 billion more under management than IA UK All Companies in second place. This sector provides truly international exposure, as portfolios within this sector are required to invest at least 80% of their assets globally in equities. They must also be diversified by geographic region.

There are plenty of interesting funds in this area but one we like is CT Global Focus, which is a high-conviction portfolio of best ideas. This is a genuinely global fund and its co-managers, David Dudding and Alex Lee, can also venture into emerging markets when they find suitable stocks meeting their criteria. They favour quality stocks with durable competitive advantages and robust business models as these are viewed as having strong and sustainable long-term growth potential.

Research all Global Equity funds.

UK All Companies 

There’s no surprise that this is the second most popular sector with UK investors as funds in this area invest in businesses listed on our home market. It has £140.9 billion of assets under management. We like the WS Montanaro UK Income fund, which focuses on small and medium-sized businesses that each offer an attractive dividend yield – or potential for dividend growth. One of the biggest plus points in favour of this fund is the size and experience of its team. This means it’s able to produce high-quality research and find opportunities missed by others.

North America

With £114.5 billion of assets under management, IA North America rounds out the top three. This is easy to understand when you consider that the US is home to some of the world’s most instantly recognisable companies, such as Amazon, Microsoft, Visa and Meta Platforms.

All of these companies are among the largest holdings in the Brown Advisory US Flexible Equity fund**, which has been run since 2017 by the experienced Maneesh Bajaj. The aim of this portfolio is to achieve capital growth by scouring its investment universe for attractive or improving businesses that are undervalued. We like how this strategy is unconstrained, meaning Maneesh has the freedom to select companies from across the market-cap spectrum. As a result, he’s regularly outperformed the S&P 500 Index.

Mixed Investment 40-85% Shares 

There are sectors catering for funds with varying concentration levels in equities, which helps people establish how much exposure they have to the stock market. The IA Mixed Investment 40-85% Shares sector, for example, is for funds that have between 40% and 85% of assets invested in equities.

We like the Liontrust Sustainable Future Managed fund, which aims to deliver income with capital growth over the long term of at least five years. The co-managers, Peter Michaelis and Simon Clements, use a thematic approach to identify key structural growth trends that will shape the future global economy. Peter recently joined us on the Investing on the go podcast to discuss the evolution of sustainable investing, including challenges in recent years, and why the future remains bright.

Volatility Managed

This intriguingly-named sector was launched in early 2017 in response to the growing number of funds aiming to deliver outcomes based around volatility and risk. It’s for funds whose objective is to manage their returns within specified volatility parameters, although these outcomes aren’t guaranteed.

One fund we like in this area is Rathbone Strategic Growth Portfolio. This is a multi-asset fund that targets risk and then looks to maximise returns. Its aim is to deliver a greater total return than the Consumer Price Index (CPI) measure of inflation +3%, after fees, over any rolling five-year period. The co-managers, David Coombs and Will McIntosh-Whyte, have complete flexibility in terms of where to invest in order to achieve their objectives.

Europe Excluding UK

Europe is a diverse region that’s packed full of fascinating cultures and innovative businesses in a wide variety of sectors. This sector has funds under management of £60.3 billion. The Janus Henderson European Selected Opportunities fund aims to provide a return – from a combination of capital growth and income – over the long term. This fund, which is typically well-diversified and contains 40 to 50 stocks, mixes mega and large-caps with some mid-cap names to help drive alpha.

Read more: Why Europe deserves a spot in your portfolio

Sterling Corporate Bond

This is the first sector that’s not at least substantially focused on equities and is the seventh most popular with £58.3 billion of assets under management. It’s for funds that invest at least 80% of their assets in Sterling-denominated (or hedged back to Sterling), corporate bond securities that are rated Triple BBB minus or above. A contender in this area is the M&G Corporate Bond fund, which is a pretty straightforward portfolio, although up to 20% of assets can be invested in higher yielding corporate bonds. The highly experienced Richard Woolnough and Ben Lord are the managers at the helm, while M&G also boast one of Europe’s largest teams of credit analysts.

Mixed Investment 20-60% Shares

We’ve already mentioned a mixed investment sector for funds with heftier allocations to equities, so this one is a step down the risk scale and has £47.2 billion under management. As its name suggests, this sector is for funds that must have between 20% and 60% in company shares and a portfolio we like in this area is Aegon Diversified Monthly Income. The aim of this fund is to generate income with a target yield of approximately 5% per annum, with the potential for capital growth over the medium term.

Global Emerging Markets

The global emerging markets aren’t for everybody. While they can offer the tantalising prospect of enhanced returns, they can also be notoriously volatile. However, for those wanting extra spice in their overall portfolio then this sector could be worth considering.

FP Carmignac Emerging Markets is a high-conviction fund that targets attractive growth from large and medium-sized companies within such emerging economies. According to its most recent factsheet, China has the largest country position with 23% of assets, followed by India, Taiwan, South Korea, Brazil, Mexico and Hong Kong**. The team looks to maintain a portfolio of 35 to 55 companies, with a focus on sectors where they feel there are sustainable, long-term growth prospects.

Sterling Strategic Bond

The final sector in the top 10 currently accounts for £38.9 billion of UK investors’ cash and is for funds that have a greater degree of flexibility. A great example is Man Dynamic Income. This fund aims to provide income and capital growth over the medium to long term by investing in bonds issued by companies and governments. The fund has the ability to buy high yield, emerging markets and government bonds, although typically avoids low yielding higher quality bonds as they’re seen as riskier to hold.

*Source: Investment Association, January 2025

**Source: fund factsheet, February 2025