Most-bought investments: September 2022
3rd October 2022 16:06
by Jemma Jackson from interactive investor
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Only one active fund makes the top 10 funds, as investors eye up buying opportunities.
interactive investor, the UK’s second-largest direct to consumer investment platform, outlines the most-bought stocks on its platform during the month of September.
Only one active fund remains in the top 10 funds: Terry Smith’s Fundsmith Equity. Six of the passive funds in the top 10 (or funds using passive strategies) were from Vanguard.
This is the lowest number of most-bought active funds that ii has recorded in any previous month, and likely reflects caution over not knowing what active funds are best placed to invest in at a time of great uncertainty. ii has seen evidence of this in previous periods of volatility.
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September has seen investors scooping up potential buying opportunities in the alternative assets space. Two newcomers included Tritax Big Box Ord (LSE:BBOX) and Chrysalis Investments (LSE:CHRY), which have been among the biggest share price laggards so far in 2022, and on deep discounts.
This marks something of a change in emphasis: over the year to date, it is capital preservation-focused trusts, such as Capital Gearing Ord (LSE:CGT) and Personal Assets Ord (LSE:PNL), that have tended to dominate. In September, RIT Capital Partners Ord (LSE:RCP) was the only capital preservation-focused trust in the top 10.
Other alternative assets-focused closed ended funds in the top 10 in September included Greencoat UK Wind (LSE:UKW), Renewables Infrastructure Group (LSE:TRIG), and Tritax Big Box Ord (LSE:BBOX). Global trusts Scottish Mortgage Ord (LSE:SMT) and F&C Investment Trust Ord (LSE:FCIT) featured too, and on the UK equity income side, City of London Ord (LSE:CTY) and Merchants Trust Ord (LSE:MRCH).
Direct equities in detail
Keith Bowman, Investment Analyst at interactive investor, said: “Share price falls of up to a fifth during the month for housebuilders Persimmon (LSE:PSN), Taylor Wimpey (LSE:TW.) and Barratt Developments (LSE:BDEV) left investors taking interest.
“Expected interest rate rises and a chaotic mortgage market following the mini-budget all weighed on prospects.
“Cuts to stamp duty and the cancelling of a planned increase in corporation tax announced within the mini-budget both swayed to the upside, with forecast double-digit dividend yields for all three FTSE 100 companies leaving them firmly in the gaze of income-orientated investors.
“The aftermath of the mini-budget also left investors pondering the outlook for major financial company Legal & General Group (LSE:LGEN). Severe disruption to the UK gilts market cast a shadow over its sizeable pension operations, leaving the shares down around 14% over the month. Like the housebuilders, that added to the attraction of a now more than 8% historic and estimated future dividend yield.
“A gloomier UK economic outlook also keep Lloyds Banking Group (LSE:LLOY) shares firmly in the eye of investors, while a possible slowing in the roll-out of 5G in the wake of elevated energy bills helped leave Vodafone Group (LSE:VOD)’s share price down by more than 10% over the month.
“Elsewhere, commodity trading operations alongside a diverse mining business kept Glencore (LSE:GLEN) a favourite. While aircraft engineer maker Rolls-Royce Holdings (LSE:RR.) continues to be assessed given its hoped-for pandemic recovery prospects.”
Funds and investment trusts in detail
Kyle Caldwell, Collectives Specialist at interactive investor, explains: “We’ve been keeping tabs on the monthly best buys among our customers for over five years, and this is the first time there’s only been one active fund in the top 10.
“The popularity of passive funds could be viewed as some investors throwing the towel in on the ability of active funds to add value, but it more likely reflects caution over not knowing what active funds are best placed to invest in at a time of great uncertainty.
“However - despite the increased preference for passive, Fundsmith Equity remains the most-bought fund.
“Managed by star investor Terry Smith, the fund has consistently delivered market-beating performance. This year, it has been a relatively strong performer this year despite its bias to expensive “growth” shares that have been under pressure due to rising interest rates.
“Among investment trusts two of the four new entries to our most-bought investment trust table for September are trading on deep discounts: Tritax Big Box REIT and Chrysalis Investment. The duo have been among the biggest share price laggards so far in 2022, so investors buying today will be hoping a change in fortunes plays out.”
Top 10 most-bought investments on interactive investor in September 2022
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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.