We’re increasingly starting to see investing attitudes shift in different directions. Using this weekly snapshot of the shares people are buying allows you to see how investor sentiment can change gradually.
To give you the latest insight into investing attitudes, I’m going to reveal the most-bought shares on the Hargreaves Lansdown platform last week and explain what these movements tell us about the current state of the markets.
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What were the 10 most-bought shares last week?
These were the most popular shares (by number of deals) on the Hargreaves Lansdown platform last week:
|2||Scottish Mortgage Investment Trust (SMT)|
|3||Witan Investment Trust (WTAN)|
|4||Royal Dutch Shell B Shares (RDSB)|
|5||Imperial Brands Group (IMB)|
|6||Lloyds Banking Group (LLOY)|
|7||BlackRock World Mining Trust (BRWM)|
|8||iShares Core FTSE 100 (ISF)|
|9||Scottish American Investment Co (SAIN)|
|10||Royal Dutch Shell A Shares (RDSA)|
What do we know about these popular shares?
Here’s a quick breakdown of some of the most popular choices to help you get a better understanding of them.
1. BP (BP)
BP is the big daddy of oil and gas in the UK and a longtime feature of the FTSE 100 index. Oil prices are on the rise, and this could be a reliable investment for those looking for dividends.
2. Scottish Mortgage Investment Trust (SMT)
These shares have suffered in the recent tech sell-off, but many investors see this as an opportunity to ‘buy the dip’. Scottish Mortgage has long been a top-performing fund. It’s just that the current financial climate is working against its holdings.
3. Witan Investment Trust (WTAN)
Witan is an investment trust with a global focus that concentrates more on income and dividends. Investors are picking these shares with the hope of dividend returns being enough to beat inflation.
4. Royal Dutch Shell B Shares (RDSB)
Royal Dutch Shell is another mammoth oil and gas firm that’s benefiting from high energy prices. Investors are seeking the company out as a solid dividend-paying business to hold in their portfolios.
5. Imperial Brands Group (IMB)
This is a huge British firm that’s well known for paying a generous dividend. You may notice a pattern emerging in this list and see that dividend income is being prioritised over capital growth.
Why were these popular investment choices?
It’s pretty clear that the wider economic impact of high inflation figures coupled with rising interest rates is really starting to affect investors’ choices.
This selection of shares isn’t exactly full of Silicon Valley unicorns or exciting industry disruptors. It’s mostly cash-generating companies or investment trusts that provide some level of income through dividends.
Inflation across the developed world is encouraging investors to rotate away from stocks and shares trading at high-growth multiples. Instead, they’re looking for more robust investments with margins that won’t be hit so hard by rising costs.
Higher interest rates also make it more expensive for firms to borrow money and fund growth. So, investors are looking to put money into shares that have healthy balance sheets and minimal debt. High rates can also discourage investing in riskier shares. Instead, it leads to savers and businesses looking to make a return by using safer assets, such as bonds or gilts.
How can you create a portfolio for this climate?
One option is to use a top-rated share dealing account to invest in a fund that tracks the whole FTSE 100. This is because the top UK index contains a lot of businesses that should fare well in the current environment.
This way, you’ll get exposure to a wide range of shares without having to pick out individual winners. If you’re just starting out with investing and need some extra guidance, we have some great resources and information on share dealing for beginners.
Whether you buy UK funds or single shares, using an account such as the Hargreaves Lansdown Stocks and Shares ISA means that you don’t have to pay tax on gains or dividends.
Keep in mind that all investing carries risk and that dividends aren’t guaranteed. So, always research carefully and aim to create a portfolio that will thrive in any financial climate.