Most-bought investments: June 2023

Tech is back as AI effect causes investors to pay attention.

• Tech makes a comeback as both Polar Capital Technology and Allianz Technology return the top 10 most-bought table in June and investors snap up chipmaker, Nvidia, on the equities side
• Royal London Short Term Money Fund not only retains a spot in the top 10, but jumps up a place – in at number 2, amid rate rises from the Bank of England
• Vanguard LifeStrategy 60% Equity falls out of the top 10

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

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The key themes for markets over the last month are familiar ones – namely, rising interest rates and red-hot inflation.

But AI has taken centre stage over the last month, as interest in ChatGPT continues to make headlines. We can see this has not gone unnoticed from investors.

NVIDIA Corp (NASDAQ:NVDA), the eighth most-bought direct equity in June, is seen by some fund managers as the star stock to play the AI theme as it manufactures the computer chips that leading AI systems are developed and implemented on. Tesla Inc (NASDAQ:TSLA) was the third most-bought direct equity, in at number three, which could also be seen as a beneficiary of the AI theme.

Amongst investment trust best buys, Polar Capital Technology Ord (LSE:PCT) and Allianz Technology Trust (LSE:ATT) were the fourth and seventh most bought in June, and both have AI among their investment themes. Among funds, L&G Global Technology Index was the fourth most-bought fund.

Below, ii looks at what was catching private investors’ eyes over the month of June in more depth.

Direct equities in detail 

Commenting on the most-bought equities in June, Victoria Scholar, Head of Investment, interactive investor, says: “Many investors are sticking to those FTSE 100 blue-chip names, which continue to dominate the most popular list of stocks on the ii platform in June. These include well-known UK names such as Lloyds Banking Group (LSE:LLOY), Vodafone Group (LSE:VOD), BP (LSE:BP.), and Glencore (LSE:GLEN), which seem to be key mainstays of many ii customer portfolios. 

“But overseas VC giant, Tesla, has also caught investor’s eyes. The stock has long been a firm favourite among ii investors and its had a fantastic year, so far.  We’ve seen Tesla’s shares surge more than 100% in the first half, making it a top performer stateside, bouncing back after the sharp sell-off across mega-cap tech last year. It is a company that often dominates the headlines and its impressive share price performance this year has added to its allure. 

“Chipmaker Nvidia is a new addition to the most-bought list of stocks on the ii platform in June, but it perhaps won’t come as a surprise. After all, the huge buzz around artificial intelligence and ChatGPT has skyrocketed its share price, which ended the first half up 190% with ii investors clearly looking for a slice of the action. 

“But who left the list? Rolls-Royce Holdings (LSE:RR.) dropped out of ii’s best buys in June. Perhaps as investors take stock after its impressively bullish run. Over the past six months, the engine maker has been the best-performing stock on the FTSE 100, surging over 60%. In May, CEO Tufan Erginbilgic, who took over in January, said its turnaround was moving at pace and reiterated the company’s full-year guidance.”

Funds and investment trusts in detail

Commenting on the most-bought funds and investment trusts on ii during the month of June, Kyle Caldwell, Collectives Specialist, interactive investor, says: “Technology shares returned to form in the first half of 2023 amid excitement over the potential of artificial intelligence (AI) to transform various industries. 

“In response, investors have been moving to profit in the hope this trend has long-term legs. Both Polar Capital Technology and Allianz Technology returned to our top 10 most-bought table in June, having last appeared in November 2022 and February 2022. Both Polar Capital Technology and Allianz Technology have plenty of exposure to the AI theme, but also seek to profit from other trends, such as cloud computing and cybersecurity.

“Investors buying in today are potentially picking up bargains, as the duo are trading on respective discounts of 14.8% and 13.1%.

“Among our most-bought funds, investors have also been looking to technology exposure through L&G Global 100 Index Trust. This passive fund has significant weightings to the US technology behemoths. It has more than 40% of its assets in just four stocks: Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN).

“When it comes to exciting investment themes, there’s always the danger of buying in too late or at a peak. To reduce risk, while its more boring, having a well-diversified portfolio is the best way to give your investments ample opportunity to grow over the long term, while guarding against serious short-term losses, such as buying at a red-hot valuation that will ultimately prove to be unsustainable. In addition, by being diversified, your portfolio is positioned to benefit over the long term when a theme or a stock market has its moment in the sun. 

“Another trend playing out is investors on the lookout for cash-like investments. This is reflected by Royal London Short Term Money Mkt fund rising from third to second place in our top 10 most-bought fund rankings. The only fund ahead of it in terms of popularity is Fundsmith Equity. Money market funds own a basket of bonds set to mature soon, meaning their prices are not very volatile. Royal London Short Term Money Market currently yields around 4.5%, and costs just 0.1% a year.

“Elsewhere, it just as interesting to see which funds move down the rankings as well as those on the up. Vanguard LifeStrategy 60% Equity has departed, having consistently featured in the top 10 most-bought funds over the past couple of years. There’s been plenty of debate over whether the 60/40 approach will work as well in the future as it has done in the past. It appears that some investors have lost faith, although this index fund does sit just outside our top 10, so it still has plenty of appeal.”

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