AJ Bell plc

03/29/2023 | Press release | Distributed by Public on 03/29/2023 09:06

Tracker funds dominate ISA season

Tracker funds dominate ISA season

Laith Khalaf
29 March 2023
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  • Eight out of the ten most popular funds this ISA season are trackers
  • Scottish Mortgage still proves popular despite boardroom turmoil
  • Popular stock picks have a distinctly British flavour

Laith Khalaf, head of investment analysis at AJ Bell, comments:

"This ISA season has been well and truly owned by tracker funds, which goes to show that the passive fund industry is still advancing onto the turf of active managers. Eight out of the ten most popular funds with AJ Bell's ISA investors so far this year are passive. Active managers will be hoping ISA investors are just using trackers to gain quick market exposure, and will return to their investment choices further down the line when they have a bit more time to consider which active fund to buy. In a market which has been choppy and therefore offered up fleeting buying opportunities, there is almost certainly some of that activity taking place, but not enough to explain such a clean sweep of the funds leaderboard by passive funds. The tracker tide is still coming in.

"Scottish Mortgage investment trust remains popular with DIY investors, despite its poor performance of late and a boardroom bust up which has seen its chair step down. This is a high octane investment, and it's continued popularity does suggest investors understand they have to take the very rough with the very smooth. At the other end of the spectrum, the conservatively managed Personal Assets trust also makes an appearance in the top ten, which indicates some investors are battening down the hatches.

"Likewise, Tesla retains a top ten spot in spite of its volatility. The stock has roughly halved in the last twelve months, but is up by 75% so far in 2023. Given the high expectations still baked into the stock price, and a somewhat maverick CEO, investors better keep buckled up for a bumpy ride. Aside from Tesla the list of the most popular stocks has a distinctly British flavour, all of them being listed in the UK and providing the dividend streams that are so commonly sought by DIY investors.

"It's been a turbulent ISA season in markets, with early optimism at the start of the year being given a reality check by the turmoil in the banking sector. There are still plenty of risks to share prices, not least continued geopolitical instability, inflationary pressures and the tectonic shift in interest rates we have witnessed in a very short space of time. Investors shouldn't let this stifle their long term investment strategy though, and those concerned about volatility should consider a regular monthly savings plan to smooth out the trials and tribulations of the market."

Most popular investments with DIY investors in an AJ Bell ISA

The table below shows the most popular open-ended funds, investment trusts and shares with DIY investors in AJ Bell's Stocks & Shares ISA between 1 January and 28 March 2023.

Open ended funds

Investment trusts

Shares

Fundsmith Equity

Scottish Mortgage

Legal & General

Vanguard S&P 500 ETF

City of London

GSK

Fidelity Index World

F&C

Tesla

iShares Core FTSE 100 ETF

JP Morgan Global Growth & Income

Lloyds

Vanguard LifeStrategy

Greencoat UK Wind

Vodafone

Vanguard FTSE Global All Cap Index

Renewables Infrastructure Group

Barclays

Fidelity Global Special Situations

Law Debenture Corporation

Rolls Royce

iShares S&P 500 ETF

Merchants

Aviva

UBS S&P 500 ETF

Murray International

Glencore

Vanguard FTSE All World ETF

Personal Assets

National Grid

Laith Khalaf

Head of Investment Analysis

Laith Khalaf started his career in 2001, after studying philosophy at Cambridge University. He's worked in a variety of roles across pensions and investments, covering both the DIY and the advised sides of the business. In 2007, he began to focus on research and analysis, and has since become a leading industry commentator, as well as a regular contributor to the financial pages of the national press. He's a frequent guest on TV and radio, and for several years provided daily business bulletins on LBC.

Contact details

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Email: [email protected]

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