Most-bought FTSE 100 shares in October 2018

With five new entries in October's list of most-popular blue-chips, Richard Hunter, head of markets at interactive investor, talks us through the changes and possible reasons for them.

The top three most-bought shares through interactive investor in October remained the same, although they traded places to finish in the amended order of Lloyds Banking, Vodafone and Glencore.

Unusually, and for the second month in a row, half of the list dropped out entirely – SSE, National Grid, GlaxoSmithKline, HSBC and International Consolidated Airlines all failed to make the cut. 

Their replacements – Tesco, Royal Mail, Aviva, Royal Dutch Shell and easyJet -  show an interesting element of bargain hunting, although generally remaining high-yielding stocks. 

As seems often to be the case in October, the Hallowe'en scare extended to markets in general, with the FTSE 100 dipping 5.1% following a better September, although the index remains unloved and down over 9% in the year to date. 

easyJet. Source: TradingView (*) Past performance is not a guide to future performance

After a breathless rise over the last year, US technology stocks bore the brunt of a weakening of sentiment, despite generally strong third-quarter company numbers being reported across the board. Escalating trade tensions between the US and China also remained a theme, while in the UK the water remained muddied in terms of ongoing Brexit discussions.

The contrarian nature of certain interactive investor customers, which in September had come in the form of International Consolidated Airlines, showed itself with another airline, namely easyJet, which came in at number 10. 

A firmer oil price in October proved a real headwind for airline stocks, and a profit warning from Ryanair dented sentiment. Elsewhere, half-year results from Tesco were generally well received, and while elephants do not gallop, there were signs of ongoing and measured progress.

• Vodafone results and 8% yield trigger buying frenzy
• The week ahead: Vodafone and Royal Mail
• Is Vodafone on the way back?
• Here's the share price to catch this falling knife

Royal Mail also entered the fray at number six, having shocked the market on the 1st October with a profit warning which was delivered with just an hour of the trading day remaining, and which saw the shares drop up to 20% as a result.

Even so, the investment story remains the same with interactive investor customers, namely buying blue chip companies on the dips in the hope of future capital growth, while being paid to wait in the form of heightened dividend income. 

Indeed, despite the relatively poor paying Tesco, Barclays and easyJet being in the list, the average yield of these 10 stocks is still 5.3%, which comfortably exceeds the average of the FTSE 100 as a whole, currently standing at 4.3%.

Most-bought FTSE 100 shares by interactive investor's customers in October 2018

Source: interactive investor, 14 November 2018. 

* September 2018