The Notebook: The stocks dominating retail investment this month
Where the City’s movers and shakers have their say. Today, Victoria Scholar, head of investment at Interactive Investor, takes the notebook pen to tell us the latest trends in retail investing, from AI to US banking
What’s trending among retail investors?
Each month at Interactive Investor (II), we take a look back at the top 10 most bought stocks and funds across our platform to get a sense of the latest trends among the retail investor community.
As usual, FTSE 100 heavyweights dominated the most bought stocks list last month including the likes of Rolls-Royce, BP, Glencore and Legal & General. GSK also saw an influx of buyers last month with retail investors possibly drawn to its defensive qualities amid concerns about the risks of a stock market correction.
We found that Tesla made it back into the most-bought equities in June, having dropped off the previous month. The electric vehicle giant has seen a remarkable rebound in its shares over the last month, rallying almost 50 per cent, swinging from a year-to-date loss to a modest gain for 2024 so far. Last week the stock surged 26 per cent and it is up 75 per cent from the trough in April, fuelled by better-than-expected delivery numbers. It delivered 444,000 cars in the second quarter, ahead of forecasts.
Also on the single stock side, Nvidia continues to be a hugely popular stock, topping the leaderboard, powered by the market’s obsession with artificial intelligence (AI) and the company’s central role in the theme. Nvidia has enjoyed a blockbuster share price performance over the last year, logging a surge of more than 200 per cent. In June, the computer chipmaker briefly became the world’s most valuable company, overtaking Microsoft.
Technology is a theme that continues to attract plenty of attention from our customers, not just via strong demand for individual equities but also through continued buying of tech funds and investment trusts. In June, two tech-focused investment trusts climbed up the rankings having departed the top 10 in the previous month. Both Polar Capital Technology Ord and Allianz Technology Trust Ord have plenty of exposure to the AI theme. Meanwhile, L&G Global Technology Index continues to benefit from a very strong appetite among II customers. It has big individual weightings to Microsoft, Apple and Nvidia – the world’s three largest companies which dominate the S&P 500.
Choppy waters
Morgan Stanley’s chief US equity strategy Mike Wilson told Bloomberg Television this week that “the chance of a 10 per cent correction is highly likely sometime between now and the election”. He said the third quarter is “going to be choppy” as the Democrats and Republicans go head to head in the run up to November 2024’s US presidential vote. It comes after US markets continue to enjoy a strong performance this year with the S&P hitting fresh record highs, gaining around 17 per cent so far in 2024, following a 24 per cent surge in 2023.
Check in with Wall Street
It’s that time again. US earnings season kicks off this Friday with results due from some of Wall Street’s biggest lenders – JP Morgan, Wells Fargo and Citigroup. All three stocks have performed very well so far this year, rallying around 20 per cent each since the start of January. Investment banking divisions have started to show signs of recovering after a period in which dealmaking was in the doldrums. Some analysts are growing increasingly positive towards US banks on the back of Fed rate cut expectations and ongoing US growth.
Vroom vroom
According to the Society of Motor Manufacturers & Traders (SMMT), new car sales in the UK grew by five per cent in June, resulting in over a million new cars leaving the forecourts in the first half of the year. This is the first time that new car sales have surpassed this major milestone since 2019 before the onset of the pandemic. The SMMT’s chief executive Mike Hawes told BBC Radio 4’s Today programme, “it’s kind of a relief to get there. We know we’re clearly heading for around 2m new car sales this year”.
Quote of the week
Government has inherited “worst set of circumstances since second world war”
Rachel Reeves, Chancellor of the Exchequer
What to listen to
On the Money – Interactive Investor
The initial stock market reaction to Labour’s landslide general election victory was positive. Longer term many fund managers have welcomed the prospect of a period of stability, which in turn may help improve investor sentiment towards UK assets. Prior to the election result, on Interactive Investor’s On The Money podcast, my colleague Kyle Caldwell spoke to Charles Luke, fund manager of Murray Income investment trust, to explore prospects for the UK stock market. It was interesting to hear Luke name several stocks he views as being undervalued, as well as finding out about how this investment trust has achieved 50 consecutive years of dividend increases. The weekly podcast is published every Thursday.