Most-bought investments: February 2021

We share details of purchases on interactive investor for February and the 2020-21 tax year ISA.

Baillie Gifford funds remain a firm favourite among customers of interactive investor amid volatile markets, accounting for seven of the 10 bestsellers in February 2021 and taking six of the top 10 ISA accounts since the start of the tax year (6 April 2020).

February overall bestsellers

Baillie Gifford American pipped Fundsmith Equity to the number one spot on the bestselling funds list last month.

Baillie Gifford Managed is a new name on the list from January in 10th position, replacing Premier Miton UK Smaller Companies Fund.

Baillie Gifford Positive Change (third), Baillie Gifford China(fourth) Baillie Gifford Global Discovery (fifth) Baillie Gifford Pacific (sixth) and Baillie Gifford Long Term Global Growth (eighth) are the other funds run by the Scotland based asset management firm to make the top 10 cut.

Vanguard LifeStrategy 80% Equity (seventh) and Vanguard LifeStrategy 60% Equity (ninth) remain the only passively managed funds on the list.

The top 10 most-bought investment trusts list remained largely unchanged. Polar Capital Technology (LSE:PCT)(in 10th position) replaces Smithson on the list with Scottish Mortgage (LSE:SMT)remaining at the top. As well as the global and tech theme, the top 10 also continues see China-focussed trusts continuing to attract attention.

Bestselling ISA investments on ii since the start of the tax year

When it comes to the top ISA purchases so far since the start of the 2020-21 tax year on 6 April 2020 (to 28 February), it is a similar story.

Active has been the flavour of the year, with actively managed funds making up all but two of the top 10 fund bestsellers list – of which six are portfolios run by Baillie Gifford, the others are Fundsmith Equity andLindsell Train Global Equity. The Vanguard LifeStrategy 80% EquityandVanguard LifeStrategy 60% Equity funds make up the passive contingent on the list.

Overall, Global has been the dominant theme since the start of the 2020-21 tax year. China was again a focus, with two of the three China specialists in the investment trust sector ranking among the top 10 most-bought funds since the start of the tax year, and one on the funds front.

Conversely, investors’ appetite to the UK remains soured. Not a single UK-focused fund made the top 10, and the only UK investment trust was industry stalwart City of London (LSE:CTY).

Teodor Dilov, Fund Analyst, interactive investor, says: “It was more of the same when it comes to our bestselling funds list for February, with Baillie Gifford once again dominating. It is clear that our customers view a number of Baillie Gifford portfolios as best-in-class strategies amid the prevailing volatile market conditions.

“What is difficult to say is whether investors are now favouring active strategies over passives – or whether it is more tied specifically to Baillie Gifford. Credit where credit is due – Baillie Gifford have done a lot to communicate what active management actually means to them with their ‘actual investors’ campaign.

“It is interesting to see that while passive funds have fallen down the rankings in recent history, reflecting the swing to active managers since the onset of coronavirus generated market volatility, Vanguard’s LifeStrategy 80% Equity and the 60% variant have held on to a top 10 ranking - proving to be the most popular option among our customers and this uses passive strategies.

“The burning question for many investors is what does the next couple of months have in store for global markets, with a number of countries taking their first steps towards easing stringent Covid-19 lockdown restrictions? It’ll be interesting to see how and if the make-up of our bestsellers lists changes as we enter a post-lockdown world.”

On the bestselling equities, Keith Bowman, Equity Analyst, interactive investor, says: “A number of themes continued to play out over February. Investor interest and buoyed by comments from Tesla (NASDAQ:TSLA) head Elon Musk helped cryptocurrency play Argo Blockchain (LSE:ARB) stay in investors' thoughts.

The roll-out of vaccinations and a timetable towards loosening Covid restrictions from the UK government left travel stocks such as IAG (LSE:IAG)and easyJet (LSE:EZJ) on the radar. Both IAG and easyJet remain down over the last year, although each is up by more than a fifth since late October – just prior to announced vaccination development success.

“For the banks, recent full-year results placed the likes of Lloyds (LSE:LLOY) and Barclays (LSE:BARC) firmly under the microscope. Broader concerns for the rise of inflation under huge central bank action programmes has also raised the potential for increased interest rates going forward – a prospect potentially positive for bank profitability given widened deposit versus lending rates.”

Top 10 most bought investments on interactive investor in February 2021

Top 10 ISA purchases on interactive investor since 6 April 2020 to 28 February 2021