Richard Hunter, head of markets at ii, said the shift was boosted by July’s earnings season, where around 80% of companies beat analyst expectations, even with the “level of mega-cap technology shares”, which have contributed to Nasdaq gains this year.
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He said further optimism was set to come, with Apple and Amazon set to provide trading updates later this week.
In terms of funds, only two active portfolios made the top ten list – Fundsmith Equity and Royal London Short Term Money Market – with UK investors continuing to prefer passive strategies, although the actives took the top spots on the list.
Kyle Caldwell, collectives specialist at ii, said investors have favoured index funds to invest in global equities due to their low fees and the clarity of returns.
The same global trend was registered for investment trusts, he noted, with four out of the top ten providing global exposure.
Scottish Mortgage and City of London were the most bought trusts for July, with JP Morgan Global Growth & Income climbing back into the top ten.
Caldwell highlighted the return of the Pershing Square Holdings trust in the most-bought list, which it had not been in for over two years.
He said: “The trust is managed by star investor Bill Ackman… who looks for high-quality business with strong barriers to entry. He also puts hedging strategies in place to reduce risk or take advantage of opportunities.
“A recent trade that paid off handsomely was putting hedges in place when interest rates were low in the expectation that rates would rise significantly. As we now know, this has played out over the past 18 months or so. Its solid performance and big discount have been catching the eye of investors of late.”
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On the stocks front, Tesla remained the most bought stock, followed by Lloyds Banking Group and Legal & General.
Victoria Scholar, head of investment at interactive investor, said Tesla has been “one of the best performing stocks” in the US this year, rebounding after the “tech wreck of 2022”.
UK blue-chips have also remained in several ii customer portfolios, partly due to their “attractive dividends”.
She added: “Vodafone, Legal & General and Aviva, which are all on this month’s list once again, boast annual yields of over 8%, appealing to investors on the hunt for income.”
Rolls Royce and Easyjet joined the most-bought stocks list for July, with the former reporting a 45% full-year operating profit upgrade. The airline’s shares have been rebounding this year, Scholar highlighted, but they remain “sharply below their pre-Covid highs”.
Micorsoft’s “aggressive spending” plans for artificial intelligence spooked investors and hit the company’s share price in July, but Scholar noted it was still in the platform’s top ten list, probably due to its positive results.
On the AI front, a lesser-known stock, RC365, also appeared on the list.
Scholar said: “The stock has enjoyed a meteoric surge since the start of the year – up over 500% – with its breathtaking gains prompting more ii investors to try to get in on the action. The payment gateway services company more than doubled revenues in the latest financial year while investors have been getting excited about its AI potential.”
