Most-bought investments: May 2021

We reveal the most-popular funds, trusts and shares on the interactive investor platform.

UK funds saw a pick-up in popularity, while US funds experienced a fall in popularity on interactive investor in May. In a turn up for the bestsellers' tables, China and Asia Pacific-focused funds and investment trusts fell out of the rankings altogether having been a popular theme over the last several months.

Baillie Gifford dominated fund purchases in 2020 and in the first quarter of 2021, but latest data from interactive investor, the UK’s second-largest DIY investment platform, suggests investors are starting to switch to passive strategies.

Baillie Gifford and Vanguard jostled for dominance in the interactive investor top 10 bestsellers' list in May, with Baillie Gifford taking three places to Vanguard’s four.

Direct equity purchases had something of a new energy flavour, with British hydrogen stock ITM Power (LSE:ITM) in first place, Tesla (NASDAQ:TSLA) in ninth, and the lithium-focusedKodal Minerals (LSE:KOD) in seventh place (lithium is used to make batteries for electric cars and mobile phones). Blue chips such as BP (LSE:BP.) and Vodafone (LSE:VOD) also sat alongside International Consolidated Airlines (LSE:IAG) and Rolls-Royce (LSE:RR.)in the top 10, while Argo Blockchain (LSE:ARB), arguably a crypto play, remains popular in third place.

Funds – UK comeback?

In a sign that sentiment towards the UK is heating up, MI Chelverton UK Equity Growthjoined UK small -cap fund Marlborough Nano Cap Growthin the top 10.

There were some constants. Fundsmith Equity retained its crown in first place, with Vanguard LifeStrategy 80% Equity still in second place.

Vanguard LifeStrategy 60% Equity, the 100% Equity option and the Vanguard US Equity Indexfund are also among the four funds by the US-based asset manager in the rankings, in third, sixth and eighth positions, respectively.

Baillie Gifford’s showing in the top 10 funds were Baillie Gifford American (fourth and one of two US fund in May, compared to three in April), Baillie Gifford Positive Change (seventh), and Baillie Gifford Global Discovery (ninth).

Investment trusts

On the investment trust front, there were two new entrants in our top 10 most-bought table for May.

Tech-centric Polar Capital Technology Trust (LSE:PCT) is the highest ranking of the two new entrants, in third position (at the expense, perhaps, of Allianz Technology (LSE:ATT), which had been in the top 10 the previous month). Cautiously positioned multi-asset portfolio Capital Gearing (LSE:CGT) in eight position, was the other new entrant on the previous month.

Of the eight trusts remaining in the top 10, just one is in an unchanged position from April: Scottish Mortgage (LSE:SMT)– which once again retains the number one spot.

Moving up three places into second position is BlackRock World Mining Trust (LSE:BRWM). In fourth and fifth place are City of London (LSE:CTY) and Edinburgh Worldwide (LSE:EWI). Both slipped two places.

In the bottom half of the top 10, Baillie Gifford US Growth (LSE:USA)climbed two positions to take sixth place. Monks (LSE:MNKS)fell three places to seventh, while Alliance Trust (LSE:ATST) and Smithson (LSE:SSON)swapped places in ninth and tenth.

Interestingly, there were no China-focused investment trusts in the top 10 in May, nor Asia-focused trusts, and the same applied to funds. This marks a significant turnaround on recent months.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The strong vaccine roll-out, as well as an improved forecast for the UK economy has renewed appetite for UK funds, with MI Chelverton UK Equity Growth making the top 10 cut in May, joining Marlborough Nano Cap Growth and investment trust City of London.

“Our customers are still favouring global portfolios, which account for sixth of the top 10 fund bestsellers, but it is interesting to see that China and Asia Pacific-focused funds and investment trusts have completely fallen out of the top 10 this month.

“It is interesting to see that our customers flocked to cautiously positioned multi-asset investment trust Capital Gearing in what was a tumultuous month for global markets amid inflation fears. It has a low weighting to equities (less than 20%) and plenty of defensive armoury through inflation-linked bonds and a small weighting to gold. The trust helped protect investors' cash during last year’s Covid-19 sell-off. Investors will hope the trust does the same amid inflation concerns.”

Commenting on the most-bought equities, Keith Bowman, Equity Analyst, interactive investor, says: “Travel-related stocks such as IAG and Rolls-Royce remained in focus as investors continued to assess recovery prospects under the ongoing global pandemic.

“Argo Blockchain has stayed in the sights of investors as a way to gain exposure to the burgeoning cryptocurrency arena, while both Tesla and ITM Power are being seen through the prism of changing energy requirements under global climate change requirements.”

Top 10 most-bought investments on interactive investor in May 2021