Top funds, stocks and trusts to invest in

Every month, we look at the bestselling funds, stocks and trusts among DIY investors.

After a rollercoaster April, May gave investors an opportunity to take stock, literally. The mood was less fearful, with many of the top funds and stocks bought reflecting a return to a risk-on mentality.

“May was an easier ride for investors, even though market movements continue to be dominated by tariff twists and turns,” Richard Hunter, head of markets at Interactive Investor, said.

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While tariff disruption characterised the month of April, May’s developments injected more positivity.

A quick trade agreement between the US and the UK provided a boost for the FTSE 100, while US-China trade relations stepped back, at least temporarily, from the triple-digit tariffs that each country had levied on the other during the height of April’s tumult.

Later in the month, the legal basis for Trump’s tariffs was challenged in court, though the impact of this on global trade is hard to predict. Trump’s administration immediately appealed the decision, and could have workarounds available even if the appeal is unsuccessful.

Nonetheless, investors were generally far more inclined to buy rather than sell in May compared to the previous month, as a look at the most popular stocks, funds and trusts reveals.

Most popular stocks

BP retained top spot in the most popular stocks list, while Nvidia and Rolls Royce both climbed one spot. Nvidia was buoyed by an earnings release that exceeded analyst expectations despite a $4.5 billion hit to its profits thanks to controls over chip exports to China.

MicroStrategy made a notable return to the list of the 10 most popular stocks in May. The software house is best-known among investors as a bitcoin proxy thanks to its accumulation of the cryptocurrency on its balance sheet (it is the world’s largest corporate holder of bitcoin). Bitcoin prices hit a new high of $112,000 on 22 May.

“Investors become more ‘risk on’ and were on the lookout for opportunities,” Kyle Caldwell, funds and investment education editor at Interactive Investor, said.

One opportunity they dived into eagerly was the dip in Marks & Spencer’s share price in the wake of the cyber attack that still prevents it taking online orders.

M&S shares fell 3.3% during May, but that actually reflects an 8.4% recovery since sinking to a low of £3.46 on 13 May. M&S shares were sixth on the list of the most popular stocks during May.

Critical minerals exploration company Metals One also entered the top 10, at number eight.

Bestselling stocks in May

1. BP
2. Rolls Royce
3. Nvidia
4. MicroStrategy
5. Glencore
6. Marks & Spencer
7. Tesla
8. Metals One
9. Legal & General
10. Lloyds Banking Group

^{Source: Interactive Investor.}

Most popular funds

The list of the most popular funds on ii’s platform also highlights the more optimistic approach investors took in May.

“Our list of the top 10 most-bought active open-ended funds also shows that investors have turned more bullish,” said Caldwell.

“In May, the number of money market funds dropped from four to two, with global funds dominating. The two new entrants were Ranmore Global Equity and Artemis SmartGARP European Equity.”

Vanguard funds continued to make up over half the most-bought passive and index funds list, with its S&P 500 trackers taking both the top spots.

Bestselling active open-ended funds in May

1. Royal London Short Term Money Market Fund
2. Fundsmith Equity
3. Jupiter India
4. Artemis Global Income Fund
5. Ranmore Global Equity Institutional GBP
6. Royal London Short Term Money Market
7. Artemis SmartGARP European Equity
8. Fidelity Global Technology
9. Fidelity Global Dividend
10. Fidelity L&G Cash Trust

Bestselling index funds and ETFs in May

1. Vanguard S&P 500 UCITS ETF (accumulation)
2. Vanguard S&P 500 UCITS ETF (distribution)
3. Vanguard LifeStrategy 80% Equity
4. iShares Physical Gold ETC
5. HSBC FTSE All World Index
6. Vanguard LifeStrategy 100% Equity
7. L&G Global Technology Index
8. Vanguard FTSE Global All Cap Index
9. Invesco EQQQ Nasdaq 100 UCITS ETF
10. Fidelity Index World

^{Source: Interactive Investor.}

Most popular investment trusts

Once again, Scottish Mortgage was the most popular investment trust among ii’s users.

Further down the list, though, there were some interesting changes, including the entry of two new renewable energy infrastructure trusts to the most-bought list: NextEnergy Solar Fund and SDCL Efficiency Income Trust.

“They join Greencoat UK Wind, which was the second-most bought investment trust,” said Caldwell. “Over the past couple of years this investment trust sector has been firmly out of favour, reflected by the average trust moving from an average 7.2% premium at the end of 2021 to a current average discount of -29.5% to net asset value.”

There was also an increased interest in European investment trusts during May, with JPMorgan European Growth & Income entering the list.

“Europe as an investment destination has been unloved for many years among UK retail investors, with sentiment not helped by the ongoing conflict in Ukraine. A lack of world-leading technology shares may also deter investors,” Caldwell added.

But the returns paint an attractive case for investing in Europe: “Over both three and five years the average European fund (Investment Association Europe Excluding UK sector) has outperformed the average UK equity fund (Investment Association All Companies sector) returning 29.9% and 61.4% versus 19.0% and 50.6%.”

Bestselling investment trusts in May

1. Scottish Mortgage
2. Greencoat UK Wind
3. City of London
4. JPMorgan Global Growth & Income
5. F&C Investment Trust
6. 3i Group
7. NextEnergy Solar Fund
8. SDCL Efficiency Income Trust
9. JPMorgan European Growth & Income
10. Alliance Witan

^{Source: Interactive Investor.}