Every month, we look at the most popular funds, equities and stocks investors are buying into. High yields and FTSE 100 stocks seem to be in favour, suggesting investors are not shying away from UK equities just yet.
As for US stocks, despite Tesla's recent share price struggle, it is still a popular choice for many, alongside Nvida, which is still going strong amid the AI boom.
And despite coming under the spotlight in recent months over its performance, the Scottish Mortgage Investment Trust continues to be a firm favourite.
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Here's a run down of what stocks, funds, and trusts investors are buying, according to investment platform interactive investor.
Top investment funds ranked
The story of April's top 10 was not all that dissimilar from March's, with many of the same funds appearing in the rankings. Vanguard FTSE Global All Cap Index was the only new entrant, ousting Vanguard LifeStrategy 60% Equity.
But Interactive Investor's collectives specialist Kyle Caldwell pointed out that the lack of major change month-on-month disguises the fact that there has been "plenty of movement" over the past 12 months. He said only five funds (and four investment trusts - more on these below) had "consistently retained a place in the top 10 over the past year".
These funds are: Fundsmith Equity; Royal London Short Term Money Market; Vanguard LifeStrategy 100% Equity; Vanguard LifeStrategy 80% Equity; and Vanguard US Equity Income Index. Incidentally, Vanguard LifeStrategy 80% Equity claimed the top spot from Fundsmith Equity in April.
“There are a couple of trends among those funds. One is a preference to 'go global' to gain diversification, which is one of the golden rules of investing. Going global has also meant that investors have been able to benefit from the AI theme, which has led to soaring share prices for a small number of US technology companies. Another trend is income-seeking investors seeking a high starting yield."
- Vanguard LifeStrategy 80% Equity
- Fundsmith Equity
- L&G Global Technology Index
- Royal London Short Term Money Market
- HSBC FTSE All World Index
- Jupiter India
- Fidelity Index World
- Vanguard LifeStrategy 100% Equity
- Vanguard FTSE Global All Cap Index
- Vanguard US Equity Index
Top investment trusts ranked
For investment trusts, BlackRock World Mining replacing India Capital Growth in the rankings was the only significant development. Caldwell said the four mainstays over the past year have been Scottish Mortgage, Alliance Trust, Greencoat UK Wind, and City of London - all of which are "currently delivering attractive yields".
He pointed out that Royal London Short Term Money Market has a yield of 5.2% thanks to its investments in "high-quality bonds with a short lifespan". Meanwhile, UK wind power specialist Greencoat offers 7% and boasts a "stellar dividend track record" having beaten RPI inflation in every year of the past decade.
City of London has a yield of 4.9% as a result of it principally opting for dividend-paying FTSE 100 companies. Caldwell added: "Manager Job Curtis, who has been at the helm since 1991, adopts a conservative approach by focusing on companies with good cash generation. City has raised its dividend for 57 years in a row, a remarkable level of consistency that is prized by many investors.”
Elsewhere, the UK’s oldest investment Trust F&C remained in the top 10, having re-entered it for the first time since October 2023 last month. Tech-centric trusts, such as Polar Capital Technology and Allianz Technology also remained popular.
- Scottish Mortgage (SMT)
- JP Morgan Global Growth & Income (JGGI)
- Alliance Trust (ATST)
- Greencoat UK Wind (UKW)
- City of London (CTY)
- BlackRock World Mining (BRWM)
- F&C Investment Trust (FCIT)
- Pershing Square Holdings (PSH)
- Polar Capital Technology (PCT)
- Allianz Technology (ATT)
Top equities ranked
FTSE 100 heavyweights continued to play a dominant role in the top 10 equities in April. The only new faces in the rankings were M&G (MNG), which has a dividend yield of around 10%, and Phoenix GP (PHNX) the investment platform said. Helium One Global (HE1) and Rio Tinto (RIO) lost out from these changes.
Victoria Scholar, head of investment at Interactive Investor, said: "Retail investors are clearly drawn to names like Legal & General, Lloyds Banking Group, and Vodafone partly thanks to their inflation topping dividend yields at around 8.6%, 5.25%, and 11.4% respectively.
"Another FTSE 100 heavyweight, BAE Systems, continues to attract much investor buying on the platform. Shares have gained around 20% year-to-date underpinned by strong demand for defence spending amid the global geopolitical instability."
However, the FTSE 100 did not claim all of the places in the top 10. Bitcoin stock market proxy MicroStrategy continued to feature, while US tech titans Tesla and Nvidia remained popular among investors.
Scholar said: "[MicroStrategy] shares have gained around 50% so far in 2024, supported by the Securities and Exchange Commission (SEC’s) approval of several spot bitcoin ETFs [exchange traded funds] in January.
"After a torrid start to the year, shares in Tesla have been regaining ground over the last month fuelled by its earnings report and CEO Elon Musk’s fruitful visit to China. Nvidia has had a tougher time in terms of its share price performance in April, but loyal investors clearly seized upon the pullback as an opportunity to buy.”
- Legal & General (LGEN)
- Tesla INC (TSLA)
- Rolls Royce Holdings (RR)
- Lloyds Banking (LLOY)
- Nvidia (NVDA)
- M&G PLC (MNG)
- Phoenix Group (PHNX)
- Vodafone Group (VOD)
- BAE Systems (BA)
- MicroStrategy (MSTR)
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