Most popular investments: What did private investors buy in September?

Private investors continued to favour defensive funds amid global volatility while all-world trackers remained popular in September.

Money market funds dominated the list of most bought active open-ended funds on investment platform Interactive Investor (ii), indicating private investors were happy to settle for slower growth in the defensive part of their portfolios in return for cash-like growth and security.

The most popular of these was the accumulating version of Royal London Short Term Money Market, but the distributing variant was high on the list too.

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Meanwhile, the Vanguard FTSE Global All-Cap UCITS ETF (LON:VALL) was the most bought exchange-traded fund (ETF) among ii’s private investors as they sought low-cost exposure to world markets.

The most bought individual stock was mining firm Glencore (LON:GLEN) which soared to the top of the list in September. Investors ‘bought the dip’ as shares in the company fell by 7% over the month.

Scottish Mortgage (LON:SMT) remained the most popular investment trust among ii’s investors, but two new real estate investment trusts (REITs) entered the top 10, indicating private investors are becoming more bullish on the property market.

Kyle Caldwell, funds and investment education editor at ii, said: “September’s rankings tell a familiar story, with investors remaining committed to low-cost global exposure, while money market funds continue to appeal for the defensive part of portfolios.

“Investors are focusing on global tracker funds that have a degree of exposure to emerging markets.” He noted, though, that the artificial intelligence (AI) rally has meant much of these gains over the past 18 months have been concentrated in a small number of emerging market stocks.

“As a result, emerging market returns have become more concentrated and reliant on the big three names of Taiwan Semiconductor Manufacturing (NYSE:TSM), Samsung Electronics (KRX:005930) and SK Hynix (KRX:000660),” said Caldwell.

Most bought equities

Investors buying the Glencore dip pushed the mining stock to the top of the list of the most popular equities, racing past other popular investments like Rolls-Royce (LON:RR.), SpaceX (NASDAQ:SPCX), and Nvidia (NASDAQ:NVDA), according to Victoria Scholar, head of investment at ii.

“After an impressive run for shares, [Glencore] lost ground in September, prompting opportunistic investors to buy the dip,” said Scholar, who attributed the slowdown to softer Chinese steel demand, lower iron ore prices and uncertainty surrounding iron ore trader Radiant World.

“Other FTSE 100 names also dominated the most bought list last month [including] longstanding favourites like Rolls Royce and Legal & General (LON:LGEN). Financials were in vogue last month with ii customers buying shares in Barclays (LON:BARC) and Lloyds (LON:LLOY)after the recent turmoil in the bond market hit banking stocks.

Source: Interactive Investor, 7 October

Meanwhile, more investors made cryptocurrency plays in September, as bitcoin treasury company Strategy (NASDAQ:MSTR) returned to ii’s list of most bought investments.

Scholar said: “[Strategy] enjoyed a strong performance last month, rallying over 22.5%, underpinned by favourable moves in the cryptocurrency market. Bitcoin broke above $85,000 last month, hitting the highest level since January.”

Money market funds dominate list of most bought active open-ended funds

Money market funds made up four of the ten most bought active open-ended funds in September, dominating the list. Royal London’s offerings were the most bought, but funds from Fidelity and Vanguard were popular too.

Caldwell said: “The enduring popularity of money market funds suggests that many investors remain cautious. While stock markets have delivered strong returns over the past year, some investors are choosing to keep a portion of their portfolio in cash-like investments that seek to deliver a yield while limiting volatility.

“Others may be using money market funds as a temporary home for cash before deploying it into equities over time.”

Source: Interactive Investor, 7 October

Caldwell added that among the remaining actively managed funds, “there’s a preference for approaches that are bold in their pursuit of outperforming the market, with Artemis Global Income, WS Blue Whale Growth and Artemis SmartGARP Global Equity, all examples of strategies investing sufficiently differently from the global stock market.”

All-world trackers were the most popular index funds and ETFs in September

The list of the most popular index funds and ETFs includes four all-world funds, with those investing in all-caps and mid-and-large caps both included.

Meanwhile, gold and silver funds hold positions in the top 10 despite the precious metals both losing value in September.

Source: Interactive Investor, 7 October

Most bought investment trusts

While neither REIT managed to reach the top five, many of ii’s private investors made real estate plays in September, buying the Schroder Real Estate Investment Trust (LON:SREI) and Tritax Big Box (LON:BBOX).

Caldwell said: “The sector has been under pressure since around 2022, in part owing to interest rate rises. Therefore, investors buying today will be hoping the sector is at a potential turning point.

“As well as the potential income attractions, property provides important diversification benefits for investors keen to manage risk. Property can also serve as a way to play future trends, including the recent boom in AI infrastructure spending.”

Source: Interactive Investor, 7 October

Aside from REITs, the top ten list includes well-known trusts like Scottish Mortgage, which was the most bought in September, and other popular growth and income trusts.