interactive investor, the UK’s second largest investment platform for private investors, outlines the most bought investments on its platform in March 2023. March’s data coincides with the end of the Tax Year, where some investors will have been trying to make the most of their annual ISA allowance.
Amid jitters in the banking sector due to the collapse of Silicon Valley Bank and the rescue of Credit Suisse by local rival, UBS, private investor demand for banking stocks was undimmed. Amongst direct equities, Barclays and Lloyds made second and third place on the list of most bought stocks in March, with HSBC making eighth position.
ii’s monthly platform purchases data suggests that some investors have given up trying to find an active fund that could deliver better returns, after a tough 2022, turning instead to passive strategies. Others might see this as a contrarian indicator.
Certainly, investment trust investors are deploying a wide range of active strategies, from renewable energy through to mining, while also embracing some of the Global and UK Generalists, with a focus on AIC Dividend Heroes. Many of these have been serving shareholders for generations, through boom and bust, depression and war. In times of uncertainty and volatility, the likes of F&C and Alliance Trust have a habit of returning to favour.
Victoria Scholar, Head of Investment, interactive investor, says: “March’s price action was characterised by turmoil in the banking sector, but despite this, Lloyds and Barclays, retained their spots on the list of most popular stocks. Both companies suffered from lacklustre share price performances, ending the month in the red. NatWest, however, which was on the most popular list in February, didn’t make the cut this month.
“Nevertheless, we saw some newcomers. HSBC, for example, was a new addition to the list after its acquisition of SVB UK, as investors pinned hopes that the purchase could help boost the shares. Despite coming under pressure in March shares in HSBC are still in positive territory year-to-date, sharply outperforming the FTSE 100.
“M&G and Aviva were two other new additions to ii’s most bought equities list in March. Both stocks suffered over the course of the month, and therefore opportunistic investors appear to be capitalising on their share price declines to pick up these stocks at a discount, amid hopes of a recovery as the banking crisis eases.
“Rolls Royce held onto its spot on the list of best buys in March. The FTSE 100 engine maker has had an incredibly strong start to 2023 in terms of its share price, up by over 50% thanks to the revival in aviation post-covid as well as its new CEO, Tufan Erginbilgic, who appears to be charming investors with his transformation plans.
“BP dropped down one place, to number 7. Shares peaked in February and faced selling pressure until mid-March, but the stock has started to regain ground since with a sharp share price boost to kick off the first trading session of April after OPEC+ surprised the market with an output cut designed to boost oil prices.
“EV giant, Tesla, which is often one of the most widely bought stocks on the ii platform, dropped from number 3 in February to 10 in March. After the 2022 ‘tech wreck’ which saw shares suffer a 65% slide, Tesla has had a terrific start to the year, up around 90%. After a very strong January and February, perhaps investors are holding off for a correction to find an attractive entry point to start buying the stock again. Although shares have surged so far in 2023, the stock is still trading at around half its valuation from the all-time high in November 2021.
“Frequent ii top ten pick, Vodafone, didn’t make it into the list of best buys in March. After a strong start to the year, shares have been under pressure since mid-February, hovering near 2002 lows. It reported weakness in its biggest market, Germany, in February and has announced plans to cut jobs in Europe. Last year, the telecoms giant cut its annual profit forecast and its CEO Nick Read stepped down at the end of 2022.”
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