Your favourite investments in July 2020

Direct share purchases continue to be heavily influenced by Covid-19. Here’s what you’ve been buying.

Baillie Gifford dominates the list of top 10 fund purchases on interactive investor in July while appetite for passive solutions waned further.

Only two of the top 10 funds in July 2020 were passives, compared to eight in March (6 of which were Vanguard funds). Illustrating what a difference a few months can make, Vanguard’s presence on the leader board was down to two in July.

Funds by the Scotland-based asset manager Baillie Gifford accounted for 6 out of the top 10 fund purchases, with Baillie Gifford American, ethical fund Baillie Gifford Positive Change, Baillie Gifford Global Discovery, Baillie Gifford Long Term Global Growth in second, third, fourth and fifth positions respectively.

Baillie Gifford China, in seventh position and Baillie Gifford Managed, in eighth, also make the cut.

Meanwhile Vanguard’s presence in the top 10 bestsellers list has dwindled over the past four months, from four funds in the top 10 in April, three in May, two in June and the same number in July. 

Vanguard LifeStrategy 80% Equity slipped three positions month-on-month to sixth in July, and the Vanguard LifeStrategy 60% Equity variant also fell down the rankings by three positions to ninth.

Elsewhere, Fundsmith Equity remains rooted in first position, while Polar Capital Global Technology fund completes the top 10.

Investment trusts

There are three new entrants to the list from last month: Baillie Gifford US Growth (LSE:USA) in eighth position, Biotech Growth Trust (LSE:BIOG) in ninth and Pacific Horizon Investment Trust (LSE:PHI) in tenth, replacing Smithson (LSE:SSON), Alliance Trust (LSE:ATST) and Monks (LSE:MNKS).

Scottish Mortgage (LSE:SMT), also managed by Baillie Gifford, remains rooted at the top of the table. It boasts a record as the most-purchased investment trust on the interactive investor platform every month bar one since February 2014.

Allianz Technology (LSE:ATT), Polar Capital Technology (LSE:PCT), Edinburgh Worldwide (LSE:EWI), BlackRock World Mining Trust (LSE:BRWM), City of London (LSE:CTY) and Worldwide Healthcare (LSE:WWH) all retain a place on the list.

Teodor Dilov, Fund Analyst, interactive investor, says: “Baillie Gifford replaced Vanguard in July as the dominant name in the top 10 most purchased funds, suggesting a recent trend towards active solutions at the expense of passive funds amid a period of heightened market volatility owing to Covid-19. The current market condition is ripe for active managers to show why it is worth paying a bit more for an actively managed solution by taking advantage of perceived inefficiencies in the market. 

“Our customers also continue to favour the diversification offered by global strategies, which account for 8 out of the top 10 bestsellers in July. Appetite for the UK remains soured, with Brexit set to come back into focus as the transition period enters its final months.”

Equities 

Commenting on the bestselling equities, Lee Wild, Head of Equity Strategy, interactive investor, says: “Our bestsellers list continues to be heavily influenced by the latest developments in the fight against the Covid-19 pandemic. 

“The reintroduction of a 14-day quarantine for people coming to the UK from Spain, following an increase in Covid-19 cases there, has soured appetite for International Consolidated Airlines (LSE:IAG). The carrier has slipped from first position in June to fourth in July. But the fact that the stock remains on the list of top 10 bestsellers shows that where some customers see obstacles, others see opportunity.

“Efforts to profit from the race to find a cure for Covid-19 continues to push healthcare stocks high up the bestsellers table, with Synairgen (LSE:SNG) and Omega Diagnostics (LSE:ODX) ranking third and eighth, respectively. 

“It is a different story when it comes to Boohoo, whose ascendancy to the number one spot comes after a drastic fall in share price following allegations of poor staff pay and unsafe working conditions at the beginning of the month. Some investors view a sell-off in shares of the online fashion retailer as a buying opportunity based on attractive long-term fundamentals. Investigations are still ongoing but, although scandals can often be short lived and quickly recovered from, it is not yet known what direct impact the allegations will have on sales.”

Top 10 most-bought funds, investment trusts and equities on interactive investor in July 2020