DIY investors sought diversification alongside AI exposure in July

Investors spread their bets during July, with some taking advantage of a dip in artificial intelligence (AI) trades alongside clear demand for more traditional sectors like infrastructure and precious metals.

Magnificent 7 hyperscalers Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) were all among the 10 most-bought stocks last month, latest data from Fidelity International’s Personal Investing platform shows.

Shares in Alphabet fell 0.3% over the course of July, though Microsoft Amazon gained a very respectable 24.6% and 13.9% respectively.

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More broadly, though, the tech sector struggled. The Nasdaq 100 index, which is heavily weighted towards tech stocks, fell 6.6% in July as concerns over the profitability of mammoth AI investments took hold.

“July was a reminder that the AI trade can be nerve-wracking,” said Jemma Slingo, pensions and investment specialist at Fidelity International. “Questions around the amount being spent on AI and the returns that investment will generate contributed to renewed volatility, but Fidelity customers continued to buy some of the world’s largest technology companies.”

Slingo highlighted, though, that the wider rankings suggest investors sought out diversification plays besides the big tech names.

Which were the most popular stocks, funds and investment trusts for investors in July?

The most-bought stocks in July

One of the most notable sectors featuring alongside big tech in Fidelity’s data on July’s most popular stocks was the precious metals space.

Despite gold prices barely moving during the month, miners Greatland Resources (LON:GGP), Fresnillo (LON:FRES) and Hochschild Mining (LON:HOC) all made the top 10 list.

^{Source: Fidelity International}

Rolls-Royce (LON:RR.) was the most popular stock of the month on Fidelity’s platform, and Babcock International’s inclusion in the top 10 reflects ongoing investor appetite for UK defence stocks.

The most-bought funds in July

Global trackers and money market funds proved the most popular fund types during July, with the top five most popular funds falling into one or other of these categories.

Besides these, multi-asset, emerging market and biotech funds also made the top 10.

“The data suggests investors are combining long-term global exposure with liquidity and selective opportunities across regions and sectors,” said Slingo.

^{Source: Fidelity International}

The most-bought investment trusts in July

Investors selecting investment trusts appear to have sought out Asia-Pacific strategies, with Henderson Far East Income (LON:HFEL) and Schroder Japan (LON:SJG) topping the list.

Slingo also drew attention to the presence of renewable energy infrastructure investment trusts that were among the top 10 in July: Foresight Solar (LON:FSFL) and The Renewables Infrastructure Group (LON:TRIG).

“These investments can provide exposure to the long-term energy transition as well as income, although the sector has faced a challenging period and remains sensitive to interest rates and wider market conditions,” she said.

^{Source: Fidelity International}