The top stocks and funds to buy according to DIY investors

Investors have taken a cautious approach when buying stocks, funds and investment trusts during March, with cash-like funds and income-generating stocks and strategies proving popular picks.

March was a turbulent month for investors, with stock markets and commodity prices shifting dramatically as the war in the Middle East erupted.

That sent oil prices higher and raised expectations for higher inflation and interest rates across the global economy.

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Research from Charles Stanley Direct shows that this has raised DIY investors’ concerns over capital preservation, with 61% of those the wealth manager surveyed saying they were worried their investments wouldn’t recover from the disruption.

“Oil shocks in particular can be exceptionally challenging for markets,” said Rob Morgan, chief investment analyst at Charles Stanley Direct. “Almost every business relies on energy in some way, so when oil and gas prices rise, they push up the cost of goods and services across the whole economy, dampening activity and eating into corporate profits.”

And data from Fidelity International reflects this cautious mindset, with cash funds and income-generating assets topping the list of the most-bought funds, stocks and investment trusts during the month.

“As ISA season draws to a close, our data suggests investors are taking a measured approach – maintaining flexibility in the short term while remaining positioned for longer-term opportunities,” said Ed Monk, pensions and investment specialist at Fidelity International.

These are the top stocks, funds and investment trusts that investors bought over the last month.

March’s most-bought funds

Cash and money market funds were DIY investors’ top fund picks during March based on Fidelity’s data.

^{Source: Fidelity International}

Five cash or money market funds made the list of the top ten funds for DIY investors during March.

“March saw a clear return to more liquid investments such as cash funds,” said Monk. “After two months in which cash funds were entirely absent from the best-seller lists – something we hadn’t seen for over two years – they re-emerged strongly as investors responded to a more uncertain market backdrop.”

That uncertainty has been brought about by the Middle East conflict, and its implications for the global economy. Higher inflation could be damaging for global growth, which would be a headwind for riskier investments like stocks.

“Cash funds can play an important role at times like this, offering stability and flexibility while investors assess where to allocate capital next,” said Monk.

March’s most-bought stocks

When buying stocks during March, most investors on Fidelity International opted for UK-based dividend-paying financial companies like Legal & General (LON:LGEN), Aviva (LON:AV.), Barclays (LON:BARC) and HSBC (LON:HSBA).

^{Source: Fidelity International}

DIY investors also seemingly exploited a buying opportunity in much-maligned airline stocks like British Airways owner International Consolidated Airlines Group and easyJet.

“The conflict in the Middle East has created a challenging backdrop for airlines, with airspace disruptions and a sharp rise in oil prices pushing up fuel costs,” said Monk.

“But demand for travel remains resilient and consumers seem to be adjusting, rather than cancelling, their plans,” he added.

March’s most-bought investment trusts

Investors’ most-bought investment trusts during March also seemingly reflect a defensive push for stability and income, as well as real assets.

“Infrastructure-focused names such as International Public Partnerships (LON:INPP) and Greencoat UK Wind (LON:UKW) featured prominently, alongside diversified trusts like F&C Investment Trust (LON:FCIT),” said Monk.

^{Source: Fidelity International}

Monk said strategies like these can “offer investors a combination of income, diversification and resilience, which can be particularly attractive during periods of market uncertainty”.