What are investors buying ahead of the ISA deadline?
This ISA season is probably unlike any other we’ve had – not even the financial crisis is comparable.
As global stock markets have plunged and remain volatile in the run up to the tax year end, investors have had to be ruthless if culling their existing holdings and more selective than ever adding stocks and funds to portfolios.
With just a couple of days to use up the full £20,000 ISA allowance, we contacted six investment platforms to find out what investors have been buying:
AJ Bell investors have been picking up ‘beaten’ stocks and funds in a bid to profit from the recent market volatility.
Laura Suter, personal finance analyst, said: “Stock market investors have put their money in airlines EasyJet and British Airways-owner IAG, which have seen their share prices fall 61% and 68% respectively since the market volatility began. The companies are struggling now, with flights grounded and global travel having come to a halt, but investors clearly think they have been oversold and the share price will rebound from current levels.
“Novacyt is a pure Coronavirus play, as it’s the company that has developed a testing kit for the virus and has reported a spike in orders as a result. The share price had already risen 954% from the beginning of the year to the start of March, but that didn’t stop investors continuing to buy, and during March the share price rose another 45%.”
Investors are also relying on fund managers to use the current markets to buy up more of their existing holdings to turn a profit, such as Fundsmith Equity, Lindsell Train Global Equity and Lindsell Train UK Equity.
Suter notes that investors are also using trackers to access the UK market, either the FTSE 100 or FTSE 250.
The top ten funds bought (alphabetical order) since 2 March:
Aviva Inv UK Listed Equity Income
FP Argonaut Absolute Return
Fundsmith Sustainable Equity
M&G Global Macro Bond
Troy Trojan (Class X)
Unicorn Outstanding British Companies
Vanguard US 500 Stock Index
Top 10 shares bought (alphabetical order) since 2 March:
International Consolidated Airlines Group SA
Legal & General Group
Lloyds Banking Group
Royal Dutch Shell A Shares
Royal Dutch Shell B Shares.
ISA customers have mostly bought stocks and Interactive Investor reports the past month has seen some of its busiest ever trading days.
Of the 50 most bought investments in March, just seven were among ETFs, funds and investment trusts, with Scottish Mortgage Trust and iShares Core FTSE 100 UCITS fund especially popular.
Myron Jobson, personal finance campaigner, said: “Stocks are considerably cheaper than they were a month ago and many of our customers have bought on the dip in the hope of snagging a bargain. While markets can always suffer from short-term sell offs, history suggests they can recover over longer periods.”
The Share Centre
Investors have been buying in the travel and leisure, as well as oil and gas sector. Banks also feature high in the list of buys:
The top 10 shares include:
Royal Dutch Shell B
International Consolidated Airlines Group
Its LifeStrategy range has proved popular with investors who want Vanguard to manage the portfolio for them. ETFs are also very popular with private investors.
It noted there was a pick up in Asia and Chinese funds in March as investors sought to avoid Europe and the US due to the coronavirus spreading there.