What have investors been buying this ISA season?

•    Perennial favourites Fundsmith Equity, Lindsell Train Global Equity and Vanguard LifeStrategy remain in vogue 
•    UK focused funds more popular than last year
•    An ethical investment trust and Tesla make the top 10

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“Investors have been opting for ethical investments, UK-focused funds and US giant Tesla this ISA season, compared to their purchases last year. While a number of stalwart funds and stocks have remained in the list of most popular investments between last year and this year, there have been some key changes in investor habits.
“Perennial favourites like Fundsmith Equity, Lindsell Train Global Equity and the Vanguard LifeStrategy funds all stayed firmly in investors’ most popular funds to buy, but investors have also gone for more UK focused funds this year. After the general election in December the so-called ‘Boris Bounce’, which now seems a lifetime away, caused markets to rise meaning more investors have put their money in the UK this ISA season, with Franklin Templeton UK Mid Cap and Henderson UK Absolute Return amongst the most popular funds bought so far. 
“Showing that ethical and environmentally-focused funds have become more popular this year, the Renewables Infrastructure trust, also known as TRIG, has made it into the top 10 after not appearing last year. There’s been a spike in investor money flowing into environmental strategies and this is a trend we expect to see continue. What’s more, this fund will have benefitted from investors looking for diversifiers in the recent market volatility, with infrastructure projects thought to be more immune from the effect of the Coronavirus than stock markets.
“A real sign of how market interests change is shown in that fact that US car company Tesla makes it into the top 10 most bought shares list, while some FTSE 100 giant companies, such as National Grid and British American Tobacco, have fallen out of the top 10 compared to last year. We can also see some Coronavirus plays from investors as biotechnology group Novacyt makes it into the top 10. The company has developed a Coronavirus test, receiving a flood of orders and causing investors to pile into the stock in recent weeks.
“One stock that has seen a fall from grace in the past year is Sirius Minerals, which was in the top 10 most bought shares this time last year and now is understandably nowhere to be seen. The company has seen its share price plummet in recent years and a deal for a takeover by Anglo American was narrowly passed earlier this month.”