Funds now account for nearly 40 per cent of all holdings held by DIY pension investors on the Interactive Investor platform, according to the company’s own data as of 31 March 2026. The figure highlights a marked preference for pooled investment vehicles among those managing their own self-invested personal pensions (SIPPs).
Breaking down the asset allocation, Interactive Investor’s data shows that funds make up 39.8 per cent of SIPP portfolios, followed by equities at 18.1 per cent, exchange-traded funds at 16.2 per cent, and investment trusts at 11.5 per cent. The remaining holdings are spread across other asset classes, but the dominance of funds points to a deliberate strategy among investors rather than a simple preference for a single product type.
Why diversification drives fund popularity
The attraction of funds lies in the diversification they offer, said Kyle Caldwell, funds and investment education editor at Interactive Investor. “When it comes to the world of investing, there are some golden rules that can greatly increase the chances of investment success, with one of the key ones being diversification,” he said. “The benefits of diversification, spreading your investments far and wide, is achieved through investing in a range of different investment types and avoiding being overexposed to one country, sector, investment style, or theme.”
Evidence from the platform suggests investors are actively mixing and matching across asset classes to achieve this balance. By holding funds alongside individual equities, ETFs and investment trusts, they aim to reduce the impact of any single poor-performing investment on their overall portfolio. Diversification remains a core principle of long-term pension saving, and the data indicates that SIPP holders are taking it seriously.
“Global funds, both those actively managed and those that track the global market return, are potential core holdings that investors can tuck away with confidence due to the diversification on offer,” Caldwell added. “In addition, due to their flexibility, global funds have the ability to provide greater levels of protection versus equity funds focused on a particular region or part of the market, such as smaller company shares.”
Money market funds have become particularly popular in this environment. Very low-risk by nature, they currently offer yields of around 3.75 per cent, which Caldwell described as “inflation-beating income” and in line with the Bank of England base rate. Investors use them to park cash balances for short periods while deciding where to invest, or to guard against stock market volatility. The ongoing Middle East conflict has prompted many to adopt a more cautious stance, with money market funds serving as a defensive holding.
Caldwell cautioned, however, that balance remains essential. “While money market funds, given their current yields, serve as useful defenders in a portfolio, having too much in cash or cash-like alternatives for long periods will hamper long-term growth.”
Another sign of the cautious mood is the presence of gold and silver funds among the most popular holdings for drawdown customers. Jupiter Gold & Silver and Ninety One Global Gold appear in Interactive Investor’s top 10 table for SIPP drawdown customers. Caldwell noted: “In particular, gold has shown its worth as a safe haven asset that behaves differently to equity markets. However, while it ultimately proved to be short-lived, the volatility that played out for silver and gold in late January serves as a reminder that the prices of both precious metals can fluctuate rapidly.”
That volatility was dramatic. Gold surpassed $4,600 per ounce and silver exceeded $84 per ounce in January 2026 before a sharp sell-off triggered by the nomination of Kevin Warsh as the next Federal Reserve chair. Silver collapsed by over 30 per cent from its peak, and gold prices plunged significantly. Technical overextension also played a role. The episode underscores that even safe-haven assets can be subject to rapid price swings.
Life-stage investment choices
The research also reveals how investment strategies differ according to whether a saver is still building their pension pot or has already started drawing an income. Camilla Esmund, senior manager at Interactive Investor, highlighted the strategic importance of SIPP choice across different life stages.
For those in the accumulation phase — investors who have not yet started to access their pot — there is a greater appetite for risk. Global equity index funds are the favoured core holdings, chosen for their potential to grow money over a longer timeframe. The top 10 funds for accumulation customers by total value include Royal London Short Term Money Market (Acc) in first place, followed by Vanguard FTSE Global All Cap Index (Acc), Vanguard LifeStrategy 80% Equity A (Acc), and Vanguard LifeStrategy 60% Equity A (Acc). Other popular choices include HSBC FTSE All-World Index C (Acc), Artemis Global Income I (Acc), Vanguard LifeStrategy 100% Equity A (Acc), Fidelity Index World P (Acc), Fidelity Cash W (Acc), and Vanguard Sterling Short Term Money Markets A (Acc).
For drawdown customers — those who have started taking an income — the priorities shift to income generation and capital preservation. Royal London Short Term Money Market Y (Acc) tops their list, followed by Vanguard LifeStrategy 60% Equity A (Acc), Artemis Global Income I (Acc), and Royal London Short Term Money Market Y (Inc). Fidelity Cash W (Acc), Jupiter Gold & Silver I (Acc), Vanguard LifeStrategy 80% Equity A (Acc), L&G Cash Trust I (Acc), Ninety One Global Gold I (Acc), and Vanguard LifeStrategy 100% Equity A (Acc) round out the top 10.
The broader market context is also shaping choices. The Bank of England held its base rate at 3.75 per cent in March 2026, citing rising inflation risks linked to the Middle East conflict. That conflict has led to market swings, sharp drops in stock prices, and concerns over inflation caused by oil price spikes — Brent crude reached $120 a barrel. The expectation of stable or potentially rising interest rates keeps money market fund yields attractive, while the Bank’s next rate review was scheduled for 30 April 2026.
Beyond market conditions, 2026 is also a pivotal year for the UK pensions industry. Digital transformation and consolidation are accelerating, with the growth of “mega-funds” and increased consolidation within defined contribution schemes. The implementation deadline for pensions dashboards is 31 October 2026, which aims to give individuals a consolidated view of their pension entitlements. There is also a growing emphasis on using pension assets for domestic investment in infrastructure and technology, driven by government initiatives. Meanwhile, changes to the inheritance tax treatment of pensions, due to take effect from April 2027, may influence SIPP saver behaviour and potentially drive withdrawals before that date.
The appearance of Jupiter Gold & Silver and Ninety One Global Gold in the drawdown top 10 underscores the cautious mood, though Caldwell noted that the volatility seen in precious metals in January serves as a reminder of their rapid price fluctuations.
