Most-bought investments: December 2021

Inflation-proofing, tech and travel dominate – and investors swoop on Boohoo.

Investors appeared to look for inflation-proofing ideas in the last month of the year, and they also switched back to technology, according to new data on investment purchases on interactive investor, the UK’s second-largest DIY investment platform.

At the same time, suggestions that the Omicron Covid variant has a lower risk of hospitalisation perhaps helped DIY investors keep their faith in travel stocks - British Airways owner International Consolidated Airlines Group (LSE:IAG) was in the top 10, as was aircraft engine maker Rolls-Royce (LSE:RR.).

There was also some opportunistic buying. In the retail arena, online clothing company Boohoo (LSE:BOO) announced its second profit warning in just four months – and it ended up being the most purchased direct equity in December, with investors arguably swooping in for a potential opportunity.

Investment trusts

Two new tech entrants to ii’s top 10 list of the most-bought investment trusts in December includedPolar Capital Technology (LSE:PCT)in fourth place (last in the top 10 in July) andAllianz Technology Trust (LSE:ATT), in fifth. Tech stocks suffered a wobble early on in 2021 but bounced back – and DIY investor sentiment appears to have followed suit.

When it came to inflation-proofing, the other new entrant was Personal Assets (LSE:PNL) in 10th place. It was only briefly out of the top 10, having last appeared in October. It adopts a multi-asset approach and is one of a small number of wealth preservation trusts, with a policy to protect and increase shareholders' funds over the long term by investing in equities, fixed-income securities, cash and cash equivalents (which may include gold). Another trust that seeks to preserve real wealth is Capital Gearing (LSE:CGT),which was the seventh most-popular trust in December.

Scottish Mortgage (LSE:SMT) once again took the top spot ahead of Smithson (LSE:SSON) in second position and HarbourVest Global Private Equity (LSE:HVPE) in third.

Funds

On the funds front, passive funds accounted for six entries in our December top 10 table – of which five are from the Vanguard stable including Vanguard LifeStrategy 80% Equity, which ranks highest in second place, and Vanguard FTSE Global All Cap Index, the sole new entry, in 10th place.

Other global strategies continued to prove popular among ii customers in December with Fundsmith Equity, L&G Global Technology Index and Rathbone Global Opportunities in first, third and sixth place, respectively.

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “Our customers sought adventurous options and inflation-proofing strategies in almost equal measure in December amid a backdrop of rising inflation and interest rates. Notably, Polar Capital Technology investment trust, Allianz Technology Trust and L&G Global Technology Index Trust were among the platform bestsellers in December. The tech sector suffered a wobble early on in 2021 but bounced back as the market rotation towards value shares fizzled out.

“Meanwhile, both Personal Assets and Capital Gearing have exposure to inflation-linked bonds and small weights to gold to protect against inflation.

“More broadly, ii customers continue to favour fund strategies that have their fingers in a number of investment opportunities globally, offering diversification amid market uncertainty stoked by a number of factors including Covid and rising inflation. The likes of Fundsmith Equity, Scottish Mortgage, the Vanguard LifeStrategy range and Baillie Gifford Positive Change, which have become industry stalwarts because of their stellar performance track record, remain popular.”

Commenting on the bestselling equities,Keith Bowman, Equity Analyst, interactive investor, says: “Studies suggesting that the new Omicron Covid variant has a lower risk of hospitalisation than previous strains helped keep travel stocks such as British Airways owner IAG on the radar for investors. Aircraft engine maker Rolls-Royce, which is paid by its airline customers depending on how many hours its engines fly, also continues to generate interest. An 11-month trading update in December offered mixed news.

“In the retail arena, online clothing company Boohoo announced its second profit warning in just four months. Both sales growth and costs had recently taken a hit as more customers than expected returned products, particularly party dresses ahead of the festive season.

“Electric car maker Tesla (NASDAQ:TSLA) gave back some of its earlier year gains as CEO Elon Musk sold stock, generating a potential discounted buying opportunity. Cinema operator Cineworld (LSE:CINE) found its shares on the back foot as its late 2019 takeover target Cineplex won a £700 million-plus Canadian court claim for breach of contract. A breach Cineworld denies given its aborted takeover came in the face of the global pandemic.”

Top 10 most bought investments on interactive investor in December 2021