Most-bought investments: September 2023

• Investors explore India’s potential, as Jupiter India and India Capital Growth surge in popularity on ii in September 
• FTSE heavyweights continue to dominate, and investors remain focused on income picks, with M&G and Phoenix Group entering the top 10 most bought stocks

interactive investor, the UK’s second-largest investment platform for private investors, outlines the most-bought investments on its platform in September 2023.

While we see some familiar trends in terms of investor behaviour on ii in September – such as the dominance of income picks, the resurgence of tech, and the popularity of some of the biggest FTSE names, one new trend has emerged; investors are turning attention towards India.

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The retail investor interest in India coincides with continued tensions between China and the US, and a time when international businesses are starting to explore India as a source of expansion. 

Direct equities in detail 

In September, ii data shows that private investors continue to favour FTSE heavyweights, such as Legal & General Group (LSE:LGEN), Lloyds Banking Group (LSE:LLOY), Rolls-Royce Holdings (LSE:RR.), Aviva (LSE:AV.), and Glencore (LSE:GLEN), which maintained their dominance in the top 10.

High dividend yields remain a magnet for income-hungry investors, with new entrants to the most-bought list, M&G Ordinary Shares (LSE:MNG) and Phoenix Group Holdings (LSE:PHNX), both offering yields exceeding 10%. While it’s important to look beyond a headline yield, last month’s half-year results saw Phoenix detailed first-half cash generation which exceeded City forecasts, helping it declare a 5% increase in its interim dividend payment. Similarly, M&G recently declared an interim dividend up 5% to 6.5p per share. But it is important not to focus on yield alone. 

Commenting on the most-bought equities in September, Victoria Scholar, Head of Investment at Interactive Investor, says: “FTSE 100 stocks like Legal & General, Lloyds, Rolls-Royce, Aviva, and Glencore continue to dominate the list of most-popular stocks on the interactive investor platform in September. This is partly thanks to the high dividends on offer within the UK blue-chip index. 

“On the hunt for income, investors have also been buying shares of M&G and Phoenix Group in the financial sector, making them both new additions to ii’s list of best buys this month, partly thanks to their impressive yields of over 10%.

“AIM-listed oil and gas exploration firm Pantheon Resources (LSE:PANR) also found itself on the list of most-popular stocks on the ii platform following a bullish estimate of nearly one million barrels of oil for its Kodiak Field in late August, helping to send shares sharply higher over the last month.

“Last month, we saw that private investors were slightly split on tech. In funds land, we saw slightly less prominence of tech funds in the top ten, but in terms of direct equities – we saw that investors are continuing to snap them up. This month, once again, US tech giants NVIDIA Corp (NASDAQ:NVDA) and Tesla Inc (NASDAQ:TSLA) retained prominent portfolio positions.

"In fact, Nvidia and Tesla have become mainstays of ii customer portfolios in recent months. This year’s hype around artificial intelligence has sent shares in Nvidia skyrocketing, while Tesla has been a standout stock market winner in 2023, rebounding from the ‘tech wreck’ last year.”

Funds and investment trusts in detail: embracing global opportunities 

Turning to funds and investment trusts, ii data reveals intriguing shifts. Over the past six months, India's stock market has been in fine form, and we can see this may have impacted some private investor behaviour on ii over the last month. For example, Jupiter India, a fund, and India Capital Growth Ord (LSE:IGC), an investment trust, both joined their respective top 10 most-bought fund and investment trust list.

It is also interesting to note that the Indian stock market has been the best-performing index post-Covid, up an impressive 146% since the 3rd of April 2020. The next-best performer by comparison is the Nasdaq, which is up 97%*. 

Also, September saw some other noteworthy additions to the investment trust list, with Regional REIT Ord (LSE:RGL) and 3i Group Ord (LSE:III) entering the scene, each with a unique story to tell.

Commenting on the most-bought funds and trusts on ii in September, Kyle Caldwell, Collectives Specialist, interactive investor, says: “India has plenty of attractions as an investment destination. It has a young population, with around one-quarter of the world’s under-25s living in India. Its young population is part of an expanding middle class, which is expected to fuel economic growth in the decades to come.”  

However, Caldwell, cautioned investors and reminds investors of the importance of diversification. He says, "However, as a single-country emerging market, investors need to bear in mind it is an adventurous area. Therefore, with such funds it is prudent to treat them as satellite holdings to add some spice. The bulk of a portfolio should be blander, with multi-asset and global funds potentially good fits to spread risk far and wide. It is also worth bearing in mind that single-country emerging market funds blow both hot and cold. Therefore, having a long-term investment horizon is key. 

Caldwell adds: “Also of note this month were two other new investment trust entrants: Regional REIT and 3i Group. The former has seen its share price halve over the past year, so investors buying today on a big discount will be hoping for a turnaround in fortunes, although this can never be guaranteed. In contrast, 3i Group has produced stellar performance over the past year, as well as longer time periods. While private equity trusts are generally out of favour in the high interest rate environment, 3i Group is bucking the trend.” 

Top 10 most-bought investments on interactive investor in September 2023

*Source: SharePad - share price return (29 September 2023)