Lloyds was the most purchased stock and Fundsmith Equity was the most purchased fund.
There was a huge peak in share and fund trading in June 2016 as investors moved to protect their portfolios ahead of the EU referendum and then take advantage of buying opportunities in the immediate aftermath of the Brexit vote on 23rd June. Trades carried out during June were double that of any previous month during 2016 and 2015. Two thirds of the trades were buys compared to sells.
Interestingly trading volumes have not reverted back to previous levels, remaining elevated throughout July to November, as investor confidence was buoyed by the post Brexit vote rally and president elect Trump’s pro-business rhetoric. Trading volumes around the US election in November were almost two thirds (64%) higher than in 2015.
The vast majority of trades (98%) continue to be carried out online and there was an increase in the trades carried out via AJ Bell’s mobile app which now accounts for almost 15% of trades.
The top 10 most purchased shares via AJ Bell Youinvest during 2016 were:
1. Lloyds Banking Group
2. Barclays
3. Glencore
4. Legal & General Group
5. Royal Dutch Shell
6. BP
7. GlaxoSmithKline
8. Vodafone Group
9. National Grid
10. HSBC Holdings
Russ Mould, investment director at AJ Bell, comments:
“The move by investors to pile up cash ahead of the Brexit vote and then aggressively buy the post-referendum dip has worked out incredibly well, showing some real contrarian savvy on their behalf, and their stock picks have looked equally shrewd in most cases.
“Glencore, Shell and BP are all among the FTSE 100’s leading performers for the year while Lloyds, Barclays and HSBC did well in the second half, amid the market-wide move into value and cyclicals that proved a huge pain trade for many professional fund managers.
“The presence of income staples like Vodafone, National Grid and GlaxoSmithKline reinforces just how important yield remains to many retail investors, even as income stocks are lagging more flighty cyclical and turnaround plays. Even if interest rates are creeping higher in the US and bond yields are rising on both sides of the Atlantic the returns they offer remain low in absolute terms and also relative to stocks, so investors may therefore continue to embrace equity as a source of income in 2017 and beyond.”
The top 10 most purchased funds via AJ Bell Youinvest during 2016 were:
1. Fundsmith Equity
2. Woodford Equity Income
3. Vanguard LifeStrategy 80% Equity
4. Lindsell Train Global Equity
5. Vanguard LifeStrategy 100% Equity
6. Vanguard LifeStrategy 60% Equity
7. Vanguard FTSE Developed World ex UK Equity Index
8. BlackRock Gold and General
9. Legg Mason IF Japan Equity
10. Stewart Investors Asia Pacific Leaders
Ryan Hughes, head of fund selection at AJ Bell, comments:
“Passive strategies and quality growth managers are prominent in the most popular funds traded in 2016. Terry Smith and Neil Woodford continue to prove themselves as two of the most popular and trusted managers in the market, while Lindsell Train has seen assets grow substantially on the back of sustained outperformance.
“The renewed interest in commodity markets has seen old favourite BlackRock Gold & General return to prominence. The surprise is the appearance of Legg Mason Japan Equity managed by veteran Hideo Shiozumi, given that Japan has had a quieter year and fallen out of favour again with investors. If interest once again picks up in Japanese equities, investors who have invested in Legg Mason Japan Equity could be in for a very interesting 2017.”