What investors are buying this ISA season

Analysis of the top selling investments via AJ Bell Youinvest (www.youinvest.co.uk) so far this ISA season shows:

  •  Fundsmith and Woodford top the fund sales table as investors focus on active management
  •  Lloyds heads the list of most popular shares as high dividend payers feature strongly
  • Scottish Mortgage tops the investment trust league following its entry to the FTSE 100

Top 10 selling funds

1

Fundsmith Equity

2

Woodford Equity Income

3

Jupiter India

4

Lindsell Train Global Equity

5

Vanguard LifeStrategy 80% Equity

6

Stewart Investors Asia Pacific Leaders

7

BlackRock Gold and General

8

Fidelity Global Technology

9

Marlborough UK Micro Cap Growth

10

Lindsell Train UK Equity

 Ryan Hughes, head of fund selection at AJ Bell, said: “The top selling funds this ISA season are dominated by active funds with just one tracker featuring in the top 10.  Perennial favourites Fundsmith Equityand Woodford Equity Income top the table but the Lindsell Train Global and UK equity funds also feature as investors opt for long term equity growth opportunities, perhaps encouraged by stock markets being at record highs.

“It is interesting that most of the top selling funds are towards the higher end of the risk scale, with a focus on global and emerging markets and a small cap focus in the Marlborough UK Micro Cap Growth fund.  BlackRock Gold and General is perhaps pointing towards a hope that the rally in commodity prices seen over the past year continues.

“Jupiter India stands out at number three as investors clearly think the sell off at the end of last year was overdone and that India has the potential to deliver as the growing middle class continues to develop. While India is likely to be volatile, the long term potential of the world’s largest democracy looks compelling for investors prepared to take a high level of risk.” 

Top 10 selling shares:

1

Lloyds Banking Group

2

BT

3

BP

4

Vodafone

5

HSBC

6

Glencore

7

GlaxoSmithKline

8

EasyJet

9

Premier Oil

10

Royal Dutch Shell

Russ Mould, investment director at AJ Bell, said:  “Three clear themes emerge from the list of the 10 most popular stocks people are buying this ISA season: 

  •  “The first is income, which remains a priority for many investors, given that the Bank of England seems in no hurry to raise interest rates, bond yields are still low by historic standards and NS&I has once more cut the rates on premium bonds. This need for a reliable inflow of cash from portfolios explains the presence of Lloyds, GlaxoSmithKline, HSBC, Vodafone, BP and Shell, all of whom are amongst the highest yielders in the FTSE 100, albeit with varying degrees of dividend cover.
  •  “The second is growth. Investors are latching onto expectations for an improved global economic environment as a number of Governments, most notably the US, look to adopt more pro-growth policies. The big banks, mining giant Glencore and airline easyJet are all ways to play faster global growth.
  • “The third is what looks to be a contrarian streak. Glencore, Lloyds and HSBC have all done well over the last year, despite widespread concerns about Glencore’s financial health and the quality and quantity of the Bank’s earnings. But investors have consistently gone against the consensus on these three names, reaping healthy returns as a result, and it may be that they are looking at BT, easyJet and Premier Oil as potential turnaround plays too, after their recent woes.”

 Top 10 selling Investment Trusts:

1

Scottish Mortgage

2

LXI REIT

3

Temple Bar

4

Finsbury Growth & Income

5

RIT Capital Partners

6

City of London

7

BlackRock World Mining Trust

8

Woodford Patient Capital Trust

9

Witan

10

Law Debenture Corporation

 Russ Mould added: “City of London, Witan, Scottish Mortgage and Temple Bar have all increased their total annual dividend for every year for at least 32 years, providing the ideal combination of both capital growth and income for strong long-term total returns. Investors’ faith in Scottish Mortgage – and the portfolio’s terrific record – are now also being reflected in the trust’s promotion to the FTSE 100 in late March, making it only the fourth closed-ended collective to feature in the UK’s headline benchmark (following founder member Edinburgh, Alliance Trust and Foreign & Colonial).

 “Growth seekers are latching on to the cyclical recovery potential offered by BlackRock World Mining Trust while long-term seekers of capital gains are looking toward Woodford Patient Capital and RIT Capital, whose portfolios feature a mix of quoted and unquoted investments.”

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