Most-bought investments: July 2022

Investors stick by their passives and wealth preservation strategies against contemplative market backdrop.

More market trepidation  

Giving the broader market context, Richard Hunter, Head of Markets at interactive investor, commented: “Investors continue to tread carefully, amidst the latest Federal Reserve decision and a barrage of corporate earnings on both sides of the pond in July.

“US indices are not yet out of the dark but they have made some progress on the back of some company earnings which, in a sign of the times, were much less weak than had been feared.

“Nevertheless, during July investor sentiment was dominated by concerns of recession against a backdrop of rising interest rates, soaring inflation, and waning consumer confidence.

“Closer to home, the mood remains contemplative - with the FTSE 100 having slipped in early exchanges, following a weaker lead from Asian markets. A number of broker downgrades across several sectors did most of the early damage. Even so, in relative terms, the UK’s premier index continues to show its mettle compared to many of its global peers and is now up 0.1% despite being up against a host of challenges which, for the moment, show few signs of abating.”

Direct equities in detail

Commenting on July’s most-bought equities, Victoria Scholar, Head of Investment, interactive investor, said: “Commodity-linked stocks like Rio Tinto (LSE:RIO), Glencore (LSE:GLEN) and BP (LSE:BP.) remained in the most-bought list of stocks on the ii platform in July, alongside long-term popular engine maker Rolls-Royce (LSE:RR.).Rolls-Royce recently named Tufan Erginbilgic its new CEO. He will begin the role at the start of 2023, taking over from Warren East who departs at year-end. Erginbilgic is a former BP executive who worked for the oil giant for over 20 years and is now a partner at PE house Global Infrastructure Partners.

“Two insurance picks made their way into July’s top 10. In addition to Aviva (LSE:AV.), which was also in June’s most-bought equities list, Direct Line (LSE:DLG)was one of this month’s newcomers to the list. The company saw increased transactions following its recent profit warning during the month. Inflationary pressures, plus longer repair times and costlier parts due to supply chain issues, has significantly impacted the cost of insurance claims over the last month.

“We have seen consistent investor interest in the banking sector this year off the back of rising interest rates and the volatility in capital markets, and July was no different. This prompted Barclays (LSE:BARC)to join Lloyds Banking Group (LSE:LLOY) on the list of the most-bought stocks on ii during July.  

“Meanwhile, in the airlines sector, easyJet (LSE:EZJ) retained its top spot, joined this month by British Airways’ parent company International Consolidated Airlines (LSE:IAG)after both companies released financial results during the month.”

Funds and investment trusts in more detail

Kyle Caldwell, Collectives Specialist at interactive investor, said: “A strong showing for stock markets in July, particularly across the pond in the US, caught the eye of some of our customers, who during the month increased exposure to risk assets.

“In our top 10 most-bought funds table, which is based on the number of buys among interactive investor customers in July, Baillie Gifford American, L&G Global Technology Index and Vanguard FTSE Developed World ex-UK Equity Index re-entered the top 10. The trio had exited the rankings in June.

“In our investment trust table, increased risk appetite was reflected by Henderson Far East Income (LSE:HFEL)entering the top 10. The fund, which was a dividend yield of 8.7%, invests across the Asia-Pacific region. Its top three country weightings are China, Australia and Taiwan. It was joined in the top 10 by another new entrant – JLEN Environmental Assets (LSE:JLEN). As well as having inflation-protection qualities the renewable energy infrastructure trusts have been in demand due to higher power prices following Russia’s war on Ukraine. This has turbocharged returns, with the average trust in the sector up 14.6% over the past year. Also in our top 10 is Greencoat UK Wind (LSE:UKW), which entered in March.

“While some investors have been upping risk there’s still plenty of caution. For funds this is reflected by seven of the top 10 being passive funds – with investors prepared to accept the market return minus fees – rather than seek out active fund managers, who may outperform or fare worse than the market. Meanwhile, in our investment trust top 10 wealth preservation strategies continue to prove popular, with Capital Gearing (LSE:CGT), Ruffer Investment Company (LSE:RICA), and Personal Assets (LSE:PNL) in fifth, sixth and seventh place in July.”

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