UK stocks soared in popularity among ordinary retail investors in January, according to the latest Retail Investor Barometer from Freetrade. The research shows that passive ETFs and tech stocks are also very popular with investors. It highlights continuing trends towards younger investors and investors diversifying their portfolios with passive investments.
Here, I take a look at the research and explore the current investing trends among UK investors.
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Most popular stocks on the Freetrade platform
Freetrade has revealed the most popular shares bought on its platform in January 2022, compared with December 2021. Freetrade’s Retail Investor Barometer sets out the latest trends in retail investing from the platform’s customers, revealing which assets are the most popular buys. UK stocks, tech stocks and passive investment ETFs were all popular buys.
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Most popular stocks in January 2022 |
Most popular stocks in December 2021 |
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1. Tesla (=) |
1. Tesla |
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2. Apple (=) |
2. Apple |
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3. Microsoft (+2) |
3. AMC Entertainment |
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4. Amazon (=) |
4. Amazon |
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5. Vanguard S&P 500 UCITS ETF (Acc.) (+5) |
5. Microsoft |
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6. Vanguard S&P 500 UCITS ETF (Dist.) (+5) |
6. Meta – formerly Facebook |
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7. Alphabet (+1) |
7. Boohoo |
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8. AMC Entertainment (-5) |
8. Alphabet |
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9. Netflix (+14) |
9. Nvidia |
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10. Nvidia (-1) |
10. Vanguard S&P 500 UCITS ETF (Acc.) |
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11. Meta (formerly Facebook) (-5) |
11. Vanguard S&P 500 UCITS ETF (Dist.) |
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12. Boohoo (-5) |
12. NIO |
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13. Lloyds (+12) |
13. Palantir |
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14. iShares UK 100 (Dist.) (+10) |
14. Pfizer |
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15. Gamestop (+2) |
15. Lucid Group |
UK stocks soared in popularity
UK stocks soared in popularity among ordinary retail investors in January, according to Freetrade’s monthly Retail Investor Barometer.
Lloyds Banking Group and the iShares FTSE100 tracker fund moved into the group of most popular stocks, with BP just missing out on the top 15. The iShares UK Dividend ETF also saw significant growth in orders, making it the most popular ETF behind trackers following the S&P 500 and the FTSE100.
Freetrade senior analyst Dan Lane said that “the green shoots of some Blighty-listed stocks among the top buys shows the UK is back on the menu and there is a growing appetite for the lowly-valued market”. He also noted that UK stocks can be a good option for investors wanting dividend income. He commented that “if it’s dividends you want, arguably the UK is a much more friendly place to find them than across the water”.
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Passive ETFs are increasing in popularity
January also saw a continuing trend for ETF investment. Passive ETFs are investment companies that buy a basket of stocks that often tracks an underlying index. This allows investors to spread their investment risk across a diversified range of shares rather than investing in a few individual companies.
It is called passive investment because there is no active fund management. The ETF buys shares across a whole index rather than picking stocks.
December’s rising investment in ETFs continued into January, with both Vanguard’s S&P 500 accumulation and income-distributing tracker ETFs now firmly established among the most popular investments. This is a passive ETF that invests in the whole of the US S&P share index.
Tech stocks are still popular
Most of the top 15 most popular stocks are tech stocks. As Dan Lane explains, “A heady mix of rate rises and post-pandemic life getting closer wasn’t enough to pull the plug on the tech party altogether.”
However, some investors are considering diversifying their portfolios, and Lane notes that the pandemic “did prompt a reassessment of how diversified we all were.”
Young investors are staying in the market
Younger investors stayed in the market, despite recent share price volatility, which many of them will be experiencing for the first time. Dan Lane commented that these younger investors “largely kept faith with tech stocks.” However, he also noted that “the growing investment in passive ETFs suggests they are diversifying their portfolios.”
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