We’ve all been there—standing in the wine aisle of a supermarket, recalling the overwhelming choice of candies as a child, or trying to select an investment fund. The sheer volume of options can sometimes be simply overwhelming.

When you log into a leading investment platform to set up a stocks and shares ISA, you’ll be met with a staggering array of up to 8,000 funds, shares, and investment trusts. For newcomers, this vast selection can be especially daunting.

The investment choices you make now can significantly shape your financial future. Some investments might double your assets, while others could lead to substantial losses.

To navigate the multitude of options, ISA providers often curate a shortlist of their top recommendations, commonly referred to as a ‘best-buy list.’

While these selections don’t come with a guarantee of success or exceptional returns, they are recommended as prudent choices by firms that have their reputations on the line.

Investment platforms rely on expert analysts to assemble these lists. These professionals conduct extensive research, meticulously reviewing hundreds of funds to identify those expected to enhance investors’ wealth.

That said, it’s important to make your own judgment on any fund you invest in. Not least because these lists have been controversial at times, with questions about how impartial some platforms have been in their ­selections of ‘best buys’.

In one case, the fund platform ­Hargreaves Lansdown included the ill-fated Woodford Equity fund on its best-buy list right up until the investment was suspended in June 2019.

Thousands of savers were left out of pocket as they struggled to get their money out when the fund collapsed.

Though Hargreaves Lansdown was not at fault for the fund’s failure, many investors said they had been persuaded to buy the fund because it was so prominently endorsed in the best-buy list.

Hargreaves Lansdown has since overhauled the process by which funds are recommended. But the fallout was a reminder to investors that these lists are not infallible.

However, the vast majority of funds endorsed by platforms have been among the top performers – or at least made strong gains.

A look at the best-buy lists

We asked financial researcher The Lang Cat to compare the best-buy lists curated by six of Britain’s biggest investment platforms: AJ Bell, Hargreaves Lansdown, Interactive Investor, Halifax Share Dealing, Fidelity and BestInvest.

One surprising takeaway is that there is little consensus between the six groups on what the best funds are. Across the six best-buy lists, 425 funds are named of which 341 are different, the Lang Cat research found. 

Just 35 funds appear on two lists, while 13 appear on three and only one appears on four. There is not a single fund that appears on five, or all six of the lists.

Steve Nelson, insight director at the research firm, says: ‘Once you put them side by side, most recommendations still appear on just one provider’s shortlist, and only a small number recur across three or four platforms. 

‘So, while these lists all present themselves as researched selections of the best available options, in practice they are still much more subjective than the branding suggests.

‘They all claim to surface standout ideas, but side by side they still look much more like editorial interpretations of quality than a shared industry view of the “best” funds.’

Holly Mackay, founder and chief ­executive of comparison website Boring Money, says it’s perhaps not surprising that there’s little overlap given the wide range of funds available.

She says: ‘Retail investors in the UK have about 12,000 funds to choose from, so I don’t think it’s overly surprising that different analysts will have ­different top picks. Any fund screening is subjective and comes down to the parameters chosen.’

The most popular funds

The fund named by four platforms (AJ Bell, Fidelity, Halifax Share Dealing and Interactive Investor) is the iShares Physical Gold.

This is a tracker fund that follows the day-to-day movements of the price of gold. The fund has returned 84 per cent in the year to the end of February as the price of gold has soared amid global political uncertainties.

Gold is a traditional safe haven, ­providing security for investors ­during times of market fluctuations.

Tom Stevenson, investment director at Fidelity International, says: ‘Gold is a traditional hedge against geo-political uncertainty and against inflation. 

‘The conflict in the Middle East is one example of heightened uncertainty, alongside other recent factors such as tariff concerns, AI disruption and early signs of stress in private credit. 

‘Gold tends to be uncorrelated with both equities and bonds, so can be a useful diversifier in a balanced portfolio.’

It is often easier to invest in a fund that tracks the price of gold than owning gold outright, as it is quicker to buy and sell your investment.

It is also a more direct route to ­benefitting from the price of gold itself than owning shares in companies that mine gold. 

Share prices can rise significantly when the price of gold surges but these companies will be exposed to many more risks, for example when it comes to production or the transport of the gold.

Most best-buy lists include at least one tracker fund that follows the price of gold. While BestInvest does not have the iShares fund on its list, it does endorse Invesco Physical Gold ETC GBX, which will yield similar returns. Hargreaves Lansdown is the only platform not to include any gold funds.

Nelson says that where there is consensus, it tends to be around familiar, scalable building blocks of portfolios: such as large index funds, broad market trackers and a relatively small number of well-established actively managed funds. 

He says: ‘What the data points to is a narrow area of agreement around a handful of familiar names, rather than broad agreement across the lists as a whole.’

Should you use lists to build a portfolio?

The most common types of funds that are named by the six platforms invest in global stocks and UK stocks, as well as many that invest in the US and European markets.

The 13 funds on three lists include BlackRock Continental European Income, Fidelity Global Dividend, Fidelity Special Situations, Liontrust UK Growth, M&G Japan, Royal London Sustainable Leaders and Vanguard Global Small-Cap Index.

Nelson says: ‘They are clearly functioning as portfolio-construction menus. It suggests the platforms are not simply saying “here are the funds we think will shoot the lights out”; but also “here are the tools we think people should use to build a whole portfolio”.’

It may be tempting to use the platforms this way as a foundation for your portfolio but, if doing so, make sure not to leave any big gaps in markets, geographies or sectors.

It’s important to note that these lists are not all built on the same basis, Nelson warns. For example, Hargreaves Lansdown and AJ Bell do not include investment trusts in their list of 67 funds.

Hargreaves has previously said they are not included because they are more ‘complex’ than alternatives such as investment funds.

Trusts are sometimes viewed as more complex because they can borrow money to increase their exposure to stock markets and their share prices don’t always reflect the value of the investments they have made. 

But this does not necessarily mean you should not own them in your stocks and shares Isa.

Many investment trusts perform extremely well. That said, none of the 13 funds most popular funds appearing on four lists is an investment trust.

The rise of Low-cost trackers

Core to most of the six best-buy lists are actively managed funds where a human manager picks the investments based on where they spot opportunities.

But low-cost index funds that track an entire market or geography – so called passive funds as they do not require the intervention of a human – are becoming increasingly popular.

Nelson says: ‘The six-provider dataset still leans towards traditional funds overall, but passive products have a large footprint.’

Of the 13 most featured funds, four are trackers – the Vanguard Global Small-Cap Index, which invests in smaller global companies, Vanguard FTSE, which tracks the UK stock market, iShares Core FTSE, which tracks the 100 largest companies in the UK, and iShares Physical Gold.

However, many do not feature the most popular trackers that investors typically put their money in.

Mackay says: ‘Boring Money tracks the best-selling funds on major retail platforms, which suggests investors are not slavishly following these lists. 

Fidelity Index World and the L&G Technology Index fund have been the most popular over the last 12 months.’

One of the most widely held funds by UK investors is the Fidelity Index World fund, however it does not appear on Fidelity’s own Select 50 best-buy list.

Stevenson explains: ‘The fund is a big and popular global tracker fund which would certainly meet the criteria for inclusion in the Select 50.

‘Our preferred fund list offers funds from across the market, however, which means many excellent funds managed by Fidelity may not appear. 

Global exposure is offered on the list via the L&G Global Equity Index Fund, which has a good index-tracking capability and is well-priced.’

Can you trust these funds?

Investment platforms have rigorous methods for selecting a fund and many meet fund managers to question them about their investments and to ask them to account for any dip in performance.

This means they can be a good place to start if you are a seasoned investor and want to begin hand-picking your own funds instead of choosing a readymade basket.

However, it’s important to remember these lists are not curated with the view of making customers the most money over a short period. 

They are selected with a long-term view and are, for the most part, sensible fund picks.

So, as with all investments, it’s important to be prepared to leave your money to grow over a long period of time.

That said, investment platforms do change these lists year by year – removing some funds and adding ­others. If you see that a fund you hold has been removed from your ­platform’s list, you should review your investment.

It doesn’t mean you should automatically sell, but research how the fund has performed and whether there have been any changes to its management or the way it invests.