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What were the most popular funds, shares and investment trusts of 2021 according to three of the main investment platforms?
Growth funds (a fund that is looking to increase its price rather than give out dividends) were particularly popular while share investors looked to crypto, famous names and bargain basement items!
AJ Bell and Hargreaves Lansdown are both very big, very popular online investing platforms that anyone can use (and many do).
They have looked at the most popular shares, funds and trusts that people like you and I have invested in this year and picked their top ten.
Now, importantly, the fact that these were popular doesn’t mean that they were good or that they will be good next year. For a start, you will notice ‘Gamestop’ mentioned below. That was a company people invested in because there was a concerted campaign on social media by some ‘activists’ to encourage them to do so. It was fun to watch from the outside, but not really a good bet for actual investors.
Still, there some names that have been not only popular but also very good investments including Baillie Gifford funds and Scottish Mortgage.
|Scottish Mortgage IT
|Fidelity Index World
|Baillie Gifford American
|Baillie Gifford Positive Change
|City of London IT
|Fidelity Global Special Situations
|International Consolidated Airlines
|Vanguard FTSE Global All Cap
|Edinburgh Worldwide IT
|Baillie Gifford Global Discovery
|Blackrock World Mining IT
|Liontrust Sustainable Global Growth
|Finsbury G&I IT
|Polar Capital Global Technology
|Baillie Gifford Global Alpha Growth
|Fidelity China Special Situations IT
|Source: AJ Bell Youinvest 01/01/21 – 30/11/21
|Top shares Jan-Nov 2021 (alphabetical, net buy)
|Top funds Jan-Nov 2021 (alphabetical, net buy)
|Top investment trusts Jan-Nov 2021 (alphabetical, net buy)
|AMC Entertainment Holdings Inc
|Baillie Gifford American
|Baillie Gifford US Growth Trust plc Ordinary Shares
|Baillie Gifford Managed
|BlackRock World Mining Trust plc Ordinary 5p
|City Of London Investment Trust Ordinary 25p Shares
|International Consolidated Airlines Group SA
|HL Select Global Growth Shares
|Edinburgh Worldwide Investment Trust Ordinary 1p
|ITM Power plc
|JPMorgan Emerging Markets
|F&C Investment Trust plc Ordinary 25p
|Lloyds Banking Group plc
|Lindsell Train Global Equity
|Monks Investment Trust plc Ordinary 5p
|Rolls Royce Holdings Plc
|Lindsell Train Global Equity – Distributing
|Pacific Horizon Investment Trust plc Ordinary 10p Shares
|Marlborough UK Micro-Cap Growth
|Scottish Mortgage Investment Trust plc Ordinary Shares 5p
|Rathbone Global Opportunities
|Smithson Investment Trust Plc ORD GBP0.01
|Schroder Managed Balanced
|Witan Investment Trust plc ORD GBP0.05
Laith Khalaf, head of investment analysis at AJ Bell, says “DIY fund buyers didn’t get the memo that value investing is back in fashion, instead largely plumping for growth strategies over the course of 2021. There are sound reasons for buying growth-orientated investments, but investors shouldn’t entirely neglect value funds, The technological revolution we’re living through, combined with loose monetary policy, could stretch the reign of growth funds far into the future. But it’s just possible that the return of inflation could spark a reassessment of how valuable the distant cash flows of growth strategies really are.” In other words, don’t just go for growth funds, assuming they will keep going up. It’s also a sound idea to go for some value funds so that you get regular income which you can either take out and spend or reinvest in the fund.
He adds, “Fundsmith Equity retains the crown of most popular fund with DIY investors, despite a relatively weak year for performance. Investors won’t be too disappointed with a 17% return, even if it is 4% shy of the wider global stock market, particularly when Smith’s exceptional track record to date is factored in.
“Investors also showed a clear preference for global funds, which seem to be cleaning up across the board when it comes to attracting new investment. As does Baillie Gifford, which runs four of the most popular funds and two of the most popular investment trusts, despite some of these posting weaker performance than investors have become accustomed to.”
Interestingly two ethical funds feature in the top ten purchases, which shows the growing interest in this area, though there has been a bit of a backlash against greenwashing this year, and the Financial Conduct Authority (FCA) is now consulting on a new fund labelling regime which should improve the information available to ethical investors.
Laith Khalaf says,“investment trust buyers showed a bit more willingness to buy local, with a couple of the most popular trusts investing in UK shares, and the Scottish Investment Trust even flying the flag for a contrarian, value approach to investment management. Interesting too that Blackrock World Mining and Fidelity China Special Situations feature, which shows trust investors are willing to look through Beijing’s crackdown on what it sees as disorderly capitalism, and the effect its chastening of the property market may have on demand for raw materials.”
Susannah Streeter, investment analyst from Hargreaves Lansdown says “Interest in GameStop and AMC Entertainment was high in 2021, with both companies still in the top ten of most popular shares, but they represent only a tiny fraction of overall client holdings. Intense interest was sparked in the meme stocks after they were among the companies targeted by an army of retail investors in January in a bid to create big losses for short sellers. The revenge saga kept bubbling up in the months following and there was also interest in the stocks as a ‘reopening play’ as retail and entertainment reopened but hopes for their recovery have been dashed again by the spread of new variants.
“EasyJet and British Airways owner IAG have been a popular stocks to buy amid hopes of their recovery, with the travel industry showing signs of limping back to health. But investors have had to buckle up for repeated bouts of turbulence with new restrictions being imposed on the airline industry with the spread of the omicron variant. It’s feared new testing requirements, which could lead to passengers becoming stranded on their travels, will cause severe repercussions in terms of booking rates over the coming months. The companies have shored up their balance sheets and there are still some signs of optimism that confidence will be restored for the crucial spring summer season.
Laith Khalaf adds “share investors have shown no shame about rummaging about in the bargain bucket in search of cheap items, with the likes of IAG, Rolls Royce and Lloyds proving popular. Even Unilever seems to be reluctantly making its way from the premium shelf towards the discount aisle, and while its valuation is still elevated compared to the market at large, compared to its own history it’s trading at one of the lowest multiples seen in the last five years. Tesla also found favour with retail investors over the course of the year, despite an eye-watering valuation, and a CEO who is starting to make Mike Ashley look like a compliant disciple of orthodox executive behaviour.
“At the more speculative end of proceedings, some investors also chose to back the crypto miner Argo Blockchain. Retail investors can no longer buy crypto ETFs, so it’s not too surprising to find crypto enthusiasts alighting on Argo Blockchain as a way to gain exposure to this emerging asset class within their SIPPs and ISAs. Needless to say, crypto assets are hugely volatile, and consumers should only invest a small amount of money which they are willing to lose.”
For next year the message is the same as usual, but with even more caution. It’s likely to be a volatile year economically, socially and politically, with rampant inflation and an increasing distrust in fiat currencies (i.e. dollars, pounds, euros) as they are inexorably devalued by quantitative easing.
So, as usual, it’s important to ‘diversify’ (i.e. spread your bets) but it’s likely that we will need to hedge more against inflation. So as well as putting around 15% of your money in gold and up to 5% in cryptocurrencies, if you like them, it’s probably best to look at companies and funds that do well in times of inflation.
Susannah Streeter says “over the course of 2021 we have urged investors not to chase the hot stocks but to pursue a well thought out long term investment strategy,” and that’s a good guiding principle for 2022.
This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.