Most-bought investments: July 2023

Investors spread their risk and go global.

• interactive investor’s top 10 most-bought funds includes six passive funds offering exposure to global shares
• In investment trust land, exposure to global technology shares is also proving popular, for example through L&G Global Technology Index Trust
• Bill Ackman’s Pershing Square Holdings returns to the top 10, having last featured over two years ago

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

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Richard Hunter, Head of Markets at interactive investor, explains the renewed sense of optimism in July for markets. “July’s earnings season has provided more upside surprises than expected so far, albeit against a fairly low level of expectations. It is estimated that with around half of the current season now complete, around 80% of companies have beaten analyst expectations, even to the level of the mega-cap technology shares, which have been major contributors to excess Nasdaq gains this year. A further test to this optimism will come later this week as both Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) provide their latest trading updates.”

Direct equities in detail 

Commenting on the most-bought equities in July, Victoria Scholar, Head of Investment, interactive investor, says: “In typical style, FTSE 100 names are dominating this month’s list of most-bought stocks on the ii platform. UK blue-chips are a mainstay of many ii customer portfolios, partly thanks to their attractive dividends on offer. Vodafone Group (LSE:VOD), Legal & General (LSE:LGEN) and Aviva (LSE:AV.), which are all on this month’s list once again, boast annual yields of over 8%, appealing to investors on the hunt for income. 

“Rolls-Royce (LSE:RR.) has returned to ii’s most-popular stocks list in July. It has enjoyed a blockbuster run so far in 2023, topped off late last month by a 45% full-year operating profit upgrade, providing another boost for the engine maker and drawing more investors towards the stock. 

“easyJet (LSE:EZJ) joins the list of most-bought stocks this month. Shares have been rebounding this year, but remain sharply below their pre-Covid highs after the pandemic heavily punished the sector. Despite this, the clouds are parting for the low-cost carrier which is predicting a record summer of profits thanks to increased ticket prices as well as the rebound in international travel over the seasonally crucial holiday season.

“Crossing the Atlantic, Tesla (NASDAQ:TSLA) is another mainstay of ii customer portfolios, maintaining its positioning on the list of most-popular stocks this month. It has been one of the best-performing stocks in the United States this year, rebounding with a vengeance after the ‘tech wreck’ of 2022. Its quarterly earnings report in July disappointed investors as profit margins suffered on the back of its price cutting strategy. Nonetheless this may have prompted investors to ‘buy the dip’ after shares pulled back following the release. 

“Also in mega-cap tech, Microsoft Corp (NASDAQ:MSFT) joined the list of most-bought stocks this month. It has attracted investors as a proxy play to this year’s hype around artificial intelligence (AI) with earnings in July outlining aggressive AI spending plans, which spooked investors and punished its share price. Perhaps the attention around its results attracted more customers to buy shares after the mini pullback. Microsoft has been another standout stock market winner, so far, this year. 

“RC365 Holding (LSE:RCGH), a lesser-known stock, has appeared in our most-bought list of equities in July. The stock has enjoyed a meteoric surge since the start of the year up over 500%, with its breathtaking gains prompting more ii investors to try to get in on the action. The payment gateway services company more than doubled revenues in the latest financial year while investors have been getting excited about its AI potential.” 

Funds and investment trusts in detail

Commenting on the most-bought funds and investment trusts on ii during the month of July, Kyle Caldwell, Collectives Specialist, interactive investor, says: “Investors are continuing to spread risk by preferring global exposure. For funds, with the exception of Fundsmith Equity, investors are favouring index funds to invest in global equities, due to their low fees and the relative certainty of getting exactly what it says on the tin – broadly the return of the index that’s being mirrored. In our top 10 most-bought funds list for July, there are six passive funds offering exposure to global shares, while specific exposure to global technology shares is also proving popular through L&G Global Technology Index Trust. 

“Passive funds dominate the top 10 funds, with the only other active fund featuring being Royal London Short Term Money Market. The fund, which is the second-most popular behind Fundsmith Equity, is attracting attention due to the rising interest rate environment. Investors like the low-risk nature of money market funds since the returns on their cash-like investments rise as interest rates increase. 

“The same global trend is playing out among investment trusts, accounting for four of the top 10 most bought in July: Scottish Mortgage (LSE:SMT), Alliance Trust (LSE:ATST), F&C (LSE:FCIT) and JPMorgan Global Growth & Income (LSE:JGGI). The latter is a new entry, however it has featured in the top 10 in 2023. 

“An investment trust that’s not been in the top 10 for some time and has returned is Pershing Square Holdings (LSE:PSH). The trust, which last featured in the top 10 over two years ago, is managed by star investor Bill Ackman. Ackman is a value investor who looks for high-quality business with strong barriers to entry.

"He also puts hedging strategies in place to reduce risk or take advantage of opportunities. A recent trade that paid off handsomely was putting hedges in place when interest rates were low in the expectation that rates would rise significantly. As we now know, this has played out over the past 18 months or so. Its solid performance and big discount have been catching the eye of investors of late.”

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