Tesla undefeated as top pick for younger UK investors, Vodafone, Lloyds and Harland & Wolff for oldies
Last updated: 09:56 02 Dec 2022 EST, First published: 09:56 01 Dec 2022 EST
Younger UK investors have shown a renewed liking for US tech stocks in the past month while falls for Tesla Inc (NASDAQ:TSLA), Vodafone and BT Group PLC (LSE:BT.A) made them the most bought investment for investors across various platforms.
On the Freetrade platform, where the average customer is aged around 31 (with over a third of customers in that 26-35 age bracket), US tech stocks and wider S&P index trackers filled all but one of the top slots.
Freetrade top 10 buys for November
- Tesla
- Amazon.com Inc (NASDAQ:AMZN)
- Vanguard S&P 500 UCITS ETF (GBP) (Dist)
- Glencore PLC (LSE:GLEN)
- Alphabet Inc (NASDAQ:GOOG)
- Meta Platforms Inc (NASDAQ:FB)
- iShares S&P 500 Hedged
- Xtrackers S&P 500 Inverse Daily Swap ETF
- Vanguard S&P 500 UCITS ETF
- Apple Inc (NASDAQ:AAPL)
Freetrade also provided a colourful 'asset quilt' representation for the whole year, showing Tesla has not given up its top spot at any point.
Moreover, among Freetrade's 0.7mln registered and funded customers, the top 10 most popular investments all year have only included three London-listed names: FTSE 100 commodities giant Glencore PLC (LSE:GLEN) has been in the top 10 for the past three months, while Lloyds Banking Group PLC (LSE:LLOY) – a perennial favourite of investors on other platforms – made a fleeting appearing in the top 10 in October and B&M European Value Retail in June.
Looking at more established platforms, the presence of US stocks is much lower - though Tesla continues to be very popular, having fallen almost 50% this year and reaching a 17-month low during the past month.
Interactive Investor (ii), owned by Abrdn PLC (LSE:ABDN) and the second largest investment platform in the UK, has Footsie-listed Vodafone Group PLC (LSE:VOD) atop its list, pushing Elon Musk's electric vehicles maker into second, as it also experienced a new long-term low, having fallen below 100p in October for the first time in this millennium.
Glencore, up more than 55% over the past 12 months, is also popular across both ii and AJ Bell, the UK's third largest platform, as is a perennial favourite of the UK's older retail investors: Lloyds Banking Group PLC (LSE:LLOY), though it has had a flat year. It was knocked off ii's top spot for the first time since September. Belfast shipyard owner Harland & Wolff Group Holdings PLC (AIM:HARL) is a relatively new entrant to both ii and AJ Bell's top 10s.
During last month it was part of a group that was appointed as the preferred bidder on the £1.6bn Fleet Solid Support (FSS) contract with the Ministry of Defence, which it called a "truly defining moment".
Hargreaves Lansdowne (HL), the largest of the UK platforms, has a very different picture (partly as it insists on only providing its list in alphabetical form!).
An unloved housebuilder is included, Bellway PLC (LSE:BWY), along with two tobacco makers, British American Tobacco PLC (LSE:BATS) and Imperial Brands Group PLC, along with oil & gas plays Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) and Harbour Energy PLC (LSE:HBR).
Income seems to be the driver, not surprising perhaps with HL having the oldest average age, though an influx of younger investors in the past few years brought that down from 54 in 2012 to 47 last year.
AJ Bell's average client age is 43, while for ii last year it was said to be 57, the oldest of the big three.
Interactive Investor's top 10 share buys for November
- Vodafone
- Tesla
- Glencore
- Cineworld Group PLC (LSE:CINE)
- Harland & Wolff
- Boohoo Group PLC (AIM:BOO)
- Lloyds Banking
- BT Group PLC
- GSK PLC (LSE:GSK, NYSE:GSK)
- BP PLC (LSE:BP.)
AJ Bell top buys for November
- Tesla
- ITV PLC (LSE:ITV)
- Vodafone
- Lloyds
- Rolls-Royce Holdings PLC (LSE:RR.)
- Harland & Wolff Group Holdings
- Amazon.com Inc (NASDAQ:AMZN)
- Dr Martens PLC (LSE:DOCS)
- Glencore PLC (LSE:GLEN)
- Legal & General PLC
Hargreaves Lansdown top 10 (alphabetic order)
- Ashtead Group PLC (LSE:AHT)
- Bellway
- British American Tobacco
- BT Group
- Diversified Energy Company
- Dr Martens PLC (LSE:DOCS)
- GSK PLC (LSE:GSK, NYSE:GSK)
- Harbour Energy PLC (LSE:HBR)
- Imperial Brands Group PLC
- Intermediate Capital Group (LSE:ICP)
Keith Bowman, senior investment analyst at ii, said investors were tempted into Vodafone after a fall of close to 10%, while it was a similar reason for BT Group PLC (LSE:BT.A) (BT Group PLC (LSE:BT.A)), with dividend yields of over 6% offering the investor attraction.
“Hopes of an easing in Chinese pandemic restrictions and a freeing of its economy helped keep potential beneficiaries such as the miners and Glencore in the eye of investors. Its shares rose by almost 13% over the month,” he said.
Sophie Lund-Yates, analyst at Hargreaves, said investors also flocked to the tobacco majors for their strong dividend, while the shares have also both delivered 20% returns this year.
Confidence in the sector may well have been buoyed by Imperial Brand’s upbeat results in the middle of the month, she added, with a fall in tobacco volumes offset by rising revenue related to price increases and market mix.
“That feeds into another core attraction, which is that tobacco companies have some of the strongest pricing power around - a serious asset in an inflationary environment. It was November when we had the worse-than-expected inflation reading. With that in mind, well-covered dividend yields and a sticky consumer base are likely why the tobacco majors were flavour of the month."
Lund-Yates said investors also seem to be tempted to buy the dip at some stocks such as Dr Martens PLC (LSE:DOCS) where a profit warning during November shaved a chunk off the group’s valuation.
“The group’s grappling with weaker demand, higher investment and a strong dollar, and pre-tax profit fell almost 6%. With choppy economic conditions on the horizon, it’s yet to be seen if the boot-maker’s brand power is potent enough to keep the top line moving at the pace expected by the market.”
Looking at investment trusts, it was surprising to see Scottish Mortgage Investment Trust PLC not at the top of the list for AJ Bell.
The FTSE 100-listed investment company has been a firm investor favourite in recent years, following a near fivefold growth in the previous decade, but 2022 has been a rare annus horribilis as its beloved US and Chinese tech stocks have been routed.
AJ Bell's top investment trusts
- Pacific Horizon Investment Trust (LSE:PHI)
- European Opportunities Trust PLC (LSE:JEO)
- Scottish Mortgage
- JPMorgan Mid Cap
- AEW UK REIT PLC (LSE:AEWU)
- JPMorgan Asia Growth & Income
- JPMorgan Global Core Real Assets
- Octopus Renewables Infrastructure Trust PLC (LSE:ORIT)
- Home REIT PLC
- City of London Investment Trust (LSE:CTY) PLC
November's top investment trusts on ii
- Scottish Mortgage
- City Of London
- F&C Investment Trust PLC (LSE:FCIT)
- Greencoat UK Wind PLC
- Blackrock World Mining Trust (LSE:BRWM)
- VinaCapital Vietnam Opportunity Fund Limited (LSE:VOF)
- Alliance Trust PLC (LSE:ATST)
- Polar Capital Technology Trust PLC (LSE:PCT)
- Ruffer Investment Trust PLC
- NewRiver REIT PLC (LSE:NRR)
Bracing with tech
For the whole of the past quarter, money app Plum said US tech and healthcare stocks in Q3 as its millennial investor customers brace their finances for a winter recession.
The three months period saw a "notable increase" in the allocation of funds to its American Dream portfolio, which tracks US firms from the S&P 500, taking 15.49% of investment in September, up from 11.94% in July.
Healthcare inflows have continued to rise among customers as investors view it as a defensive option in the current economic climate, Plum said, with its Medic health fund taking just under 10% of allocation, though this is slightly lower than a peak of 10.45% in July but well up on the 4.96% of inflows in January.
Inflows to the Best of British fund, tracking the performance of the FTSE All-Share index, remained at around 3% from July until the end of September, though this is nearly double the share it had at the start of the year (1.65% in January 2022).
Plum's Tech Giants fund, which tracks the largest global technology firms like Apple, Microsoft and Alphabet, continues to take the largest share overall but has seen its allocation shrink in 2022, falling to 39.44% of the share in September from 48.76% in January.
Victor Trokoudes, CEO of Plum said: “It’s interesting that the funds tracking the S&P 500 seem to be coming into favour with our customers who will have benefited from the recent improvement in market performance. Perhaps this reflects a view of the US market as the global crucible of wealth creation and a belief that the (Federal Reserve) Bank of America is getting closer to the end of its rate-rising cycle. Healthcare continues to grow its inflows too, as customers consider this an essential defensive sector during unstable times."
