Scottish Mortgage Investment Trust remained the most popular investment trust on the major UK platforms
Cyclical stocks and passive funds made a comeback among investors in the past month, while small cap () continued to mix it with the blue chips.
Investors saw value in British Airways owner () and aero engine maker Rolls Royce Holdings PLC (), which were in the top three most popular shares on the major investment platforms, a trend that was also emerging with investors the previous month.
This also fitted into the wider market theme of investor rotation from growth stocks to value stocks, typically more cyclical and mature businesses.
“A major theme was travel and, in particular, airline and airline-related stocks,” said noted Richard Hunter, head of markets at Interactive Investor.
“Other demand-led shares in the event of a recovery saw a number of oil stocks in the list, with the ever-present Lloyds Banking also falling into that category, as investors tried to get ahead of a potential return to some kind of normality later in the year.”
Pondering the cyclical flavour of the month, analyst Laith Khalaf at AJ Bell said the likes of Rolls Royce, IAG, and () are among those “stocks that will do well if there is a strong economic recovery”.
UK investors continued to look overseas for opportunities, though () and () were the only non-UK shares in the top 10s.
The weakness of Tesla stock was a big reason to tempt bargain hunters, with Khalaf also lumping () into this category.
“While both have suffered a fall from grace in recent weeks, they are long term winners that have benefited from investors’ focus on future earnings growth.
“This split between growth and value stocks reflects a dichotomy of views in the market, on whether or not inflationary pressures are building, and perhaps promising a reversal of the trends we have seen in the market for the last decade,” he said.
Most bought stocks on Interactive Investor March
- Rolls Royce Holdings PLC
- PLC ()
- Cineworld Group ()
Top 10 shares on AJ Bell
- International Consolidated Airlines
- Rolls Royce
- Argo Blockchain
- PLC ()
- Gamestop Inc ()
- Astrazeneca PLC ()
On the investment trust front, City of London re-entered the Interactive Investors top 10 table of the most bought investment trusts among interactive investor customers following a four-months absence.
Prior to departing the list in November, the trust had been a regular member of the top 10, with its income consistency a key attraction.
“The resurgence of City of London adds to a growing body of evidence that investor sentiment to the UK has started to pick up following a tumultuous period for the region owing to Brexit uncertainty and the pandemic,” said Teodor Dilov, fund analyst at Interactive Investor.
“The Investment Association also reports that UK funds ended an eight-month streak of outflows in February. With the UK on the cusp of exiting lockdown, it will be interesting to see if the seemingly renewed appetite remains.”
Polar Capital Technology lost its place in the II top 10, though the rest of the trust remained in the same place as the month before.
Scottish Mortgage continued to be the most popular investment company across platforms, despite the recent wobble for big tech stocks.
Baillie Gifford, the manager of the FTSE 100-listed trust, also has several others in the top 10s, Edinburgh Worldwide and Baillie Gifford US Growth occupy second and third place, while Pacific Horizon is in fifth position.
While Baillie Gifford is losing long-running manager James Anderson, they are winning lots of followers, noted AJ Bell’s Khalaf.
“The sheer number of Baillie Gifford funds hitting the sweet spot with investors shows the investment group is far from a one trick pony, and while the departure of James Anderson is of course a blow, success has not been limited…