Most-popular investments in January 2021

Tensions appear as momentum stocks such as GameStop jostle for space among more traditional blue-chip and value plays.

January proved to be an unprecedented month, when ‘keyboard warriors’, and those who follow them, took on the Establishment. This has also been partially reflected in the top 10 January purchases among interactive investor customers, although the major theme was airline stocks and popular UK shares.

It was also a record-breaking month for international trades on interactive investor, the UK’s second-largest direct-to-consumer investment platform.

Argo Blockchain (LSE:ARB), a publicly traded blockchain technology company focused on large-scale cryptocurrency mining, topped the bestsellers list on ii in January, ahead of Lloyds Banking Group (LSE:LLOY) in second position and Rolls-Royce (LSE:RR.) in third – with GameStop (NYSE:GME)catapulting into the most-bought table to rank seventh.

Richard Hunter, Head of Markets, interactive investor, says: “In a sign of the times, speculation surrounding cryptocurrencies and the retail “Reddit army” versus institutional story were reflected in the most-popular January stocks, with Argo Blockchain coming in first and GameStop seventh.

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“Traditionally, top buys have tended to focus on blue chips and potential value plays – recently this has been the banks or airlines, along with the success stories (to date) of Tesla (NASDAQ:TSLA). But January saw a tension appear, with momentum starting to jostle for space, with the likes of GameStop entering the top 10.

“While the average trade value of GameStop in January was the lowest amongst the top 10 most-traded stocks, with an average trade (buy) amounting to £4,480 (compared, for example, to an average buy trade value of £8,081 for Lloyds), these are not small numbers. This army of keyboard warriors, and those who follow them, could end up getting hit by their own shrapnel and we are urging extreme caution.

“Overall, the major theme, however, was travel and, in particular, airline and airline-related stocks, as four made the top 10 in the form of International Consolidated Airlines Group (LSE:IAG), Rolls-Royce, TUI (LSE:TUI) and easyJet (LSE:EZJ), as investors tried to get ahead of a potential return to some kind of normality later in the year.”

On the funds front, Fundsmith Equity retook the number-one spot on the bestselling funds list after being deposed from the top position by Baillie Gifford American in December.

But Baillie Gifford continue to dominate the best-buy fund table, accounting for six of the top 10 in January - with Baillie Gifford American in second place ahead of Baillie Gifford Positive Change (third), Baillie Gifford China (fourth) Baillie Gifford Global Discovery(fifth)Baillie Gifford Pacific (sixth) and Baillie Gifford Long-term Global Growth (10th).

Premier Miton UK Smaller Companies is a new face on the list in ninth position, and Vanguard LifeStrategy 80% Equity(seventh position) and the  60% Equityvariant (eighth position) complete the top 10.

The top 10 most-bought investment trusts list remained largely unchanged. Smithson (LSE:SSON) (in ninth position) replaces Pershing Square Holdings on the list with Scottish Mortgage (LSE:SMT) remaining at the helm. China continues to be in focus – of the three China specialists in the investment trust sector, two made the top 10 in January, a theme that started to emerge in October last year.

Teodor Dilov, Fund Analyst, interactive investor, says: “Amid what many consider was a barmy market environment fuelled by the battle between Wall Street and Reddit traders, the list of bestselling funds and investment trusts remained largely unchanged – a testament to the faith our customers have in these portfolios.

“A UK-focused strategy finally made the top 10 cut, with Premier Miton UK Smaller Companies Fund in ninth position. Whether this signals a renewed appetite to the UK market remains to be seen, but with Brexit now out of the way, a reasonable allocation to the UK could provide diversification and potential recovery opportunities in 2021.”

Top 10 most-bought funds, trusts and equities on interactive investor in January 2021