Most-bought investments: December 2022

Opportunists look to buy on dips, Fundsmith Equity retains its top spot, and wealth preservation strategies return to vogue.

• Fundsmith Equity was one of three active fund picks from ii customers in December, and also remained number one open-ended fund pick for the entirety of 2022
• Scottish Mortgage and City of London stay in the top 10 investment trusts for December and were the only two trusts that stayed on the monthly most-bought list for the entire year
• There are two new entries on the most-bought open-ended fund list: Royal London Short Term Money Market fund, and wealth preservation strategy CG Real Return Fund
• Tesla manoeuvres into the top spot after a challenging year

interactive investor, the UK’s second-largest investment platform for private investors, outlines the most-bought stocks on its platform during the month of December 2022.

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Recessionary and inflationary fears seemed firmly top of the agenda at the end of 2022, and investors have been positioning their portfolios accordingly.

There was also some opportunistic buying of some stocks that have had a particularly torrid time, with Home REIT (LSE:HOME) a case in point. Illustrating that buying on the dip can be far from smooth, the trust has since suspended its shares, due to the audited annual results being delayed due to 'enhanced audit procedures' (more detail below).

Direct equities in detail

Looking at the most-bought equities among ii customers during the month of December, there are some familiar FTSE 100 names such as Glencore (LSE:GLEN) and Lloyds Banking Group (LSE:LLOY). Another FTSE giant, and a regular on the ii most-bought equities list, Vodafone Group (LSE:VOD), came in at number two having been displaced by EV giant Tesla Inc (NASDAQ:TSLA), which moved up a place month-on-month, capturing the top spot.

Oil and gas giant BP (LSE:BP.), has shot from number 10 (in November) to number 4 in December – replacing Cineworld Group (LSE:CINE), which fell out of the list. Another oil and gas company, Pantheon Resources (LSE:PANR), also joined the list in December – in at number 10.

Commenting, Victoria Scholar, Head of Investment, interactive investor, says: “Remaining in the most-popular stocks on the ii platform in December were the usual FTSE 100 heavyweights including Glencore, Vodafone, BT Group (LSE:BT.A), Lloyds, and BP. Boohoo Group (LSE:BOO) also retained its place on the most-bought list of stocks. Amid increased caution ahead of a projected UK recession, GSK (LSE:GSK) was added to the most-popular list in December, as well, suggesting that some investors may be shifting towards more defensive plays.

“US tech heavyweight, Amazon (NASDAQ:AMZN), joined fellow US tech pick Telsa as one of the most-bought stocks on the platform in December, which is particularly interesting after a challenging year for the company, in which the e-commerce giant suffered a 50% slide in its share price. Perhaps some investors are hoping that this stock could stage a recovery, and opportunistic investors are viewing the slump as a chance to buy the stock for half the price.

“However, December also saw some stocks fall out of the most bought list altogether. Cineworld, which is undergoing bankruptcy proceedings and is down 90% over a one-year period, did not make the top 10 this time round.

“Overall, after a particularly challenging year for investors in which most global indices suffered declines, 2023 looks set to pose further obstacles which will need navigating. This ranges from slowing global growth to ongoing elevated inflation levels. However, the prospect of slowing interest rate increases and China’s economic reopening could offset these pressures to some extent. But only time will tell.”

Funds and trusts in detail

Fundsmith Equity remained the most-bought fund in December, with Vanguard LifeStrategy 80% Equity in second place. Yet again, Vanguardfunds continue to dominate, making up six of the top 10 most-bought funds during the month.

Commenting on the most-bought funds and investment trusts on ii during the month of December, Sam Benstead, Deputy Collectives Editor, interactive investor, said: “The final month of 2022 saw just a couple of changes to the most-bought investment trust list, with RIT Capital Partners (LSE:RCP) and Home Reit attracting bargain-hunter investors; these were the only new entries.

“Shares in Home Reit, which aims to fund accommodation for homeless people, plummeted in December as law firm Harcus Parker said it was seeking compensation for shareholder loses because it believed the Reit had not followed its original investment theses. This may have prompted some investors to ‘buy the dip’ as its discount to net asset value (NAV) dropped to 60% and the shares fell about 25% over the month. Buying on the dip is no guarantee of anything, of course, and on 3 January, Home Reit announced it was suspending trading in its shares as it was unable to publish audited annual results on time. It was required to publish them by 31 December 2022 but failed to do so as it was undergoing 'enhanced audit procedures.'

“RIT Capital Partners, the wealth preservation trust linked to the Rothschild banking dynasty, fell 6% in December, taking its loss for 2022 to 21.5%. The trust currently trades at a 13% discount, but it was as low as 20% in December, suggesting interactive investor customers were on the lookout for bargains. ii customers are no strangers to wealth preservation strategies, however, and in the first several months of the year, interactive investor customers were turning towards capital preservation strategies as defensive armoury to weather market storms and help defend against inflation – this became less prevalent towards the latter months of the year, so it is interesting to see this capital preservation trust capturing attention from investors in December.

“Scottish Mortgage (LSE:SMT) and City of London (LSE:CTY) stayed on the monthly most-bought list for the entire year, and they were the only two trusts to do so, as investors kept faith in Baillie Gifford’s flagship 'growth' trust and continued to pick up in income from City of London. F&C Investment Trust (LSE:FCIT) and Alliance Trust (LSE:ATST) were two other global favourites on the list in December.

“There were two new entries on the most-bought open-ended fund list: Royal London Short Term Money Market fund, and wealth preservation strategy CG Real Return.

“Money market funds seem to be back in vogue, as investors seek better returns on their cash now that interest have risen. Royal London Short Term Money Market generates a distribution yield of nearly 3% by investing in short-dated bonds. 

“The only other active fund on the most-bought fund list was Fundsmith Equity, which retained the top spot throughout 2022. 

“Once again, Vanguard’s LifeStrategy range remained popular. This could be due to investors seeking to keep costs down and own the entire market, rather than put their trust into a fund manager to pick winning shares for them for a higher fee. Particularly in such volatile times.”

Top 10 most-bought investments on interactive investor in December 2022