Proactive Investors - Lloyds Banking Group PLC (LON:LLOY) was the most popular share among UK retail investors in 2022, followed either by BP PLC (LON:BP) or Rolls-Royce Holdings PLC (LON:RR).
That’s according to two of the country’s three biggest investment platforms, where the average investor’s age is close to 50 – but for investors under-35 the top share pick over the year was Tesla Inc (NASDAQ:NASDAQ:TSLA), followed by Apple Inc (NASDAQ:AAPL) and Amazon Inc.
In very simple terms, older UK investors like FTSE 100 companies, especially banks and insurers, with the odd travel-related or mining share thrown in.
Income stocks are, perhaps unsurprisingly, more attractive to older investors.
Under 35s on the other hand are mad for US tech stocks, with a Chinese stock or two in the mix, with capital appreciation and a greater penchant for risk is also less surprising.
Popularity of US stocks
Sam North, analyst at eToro, where the average age of its clients is 34, interprets the motivation for the platform’s investors is the valuation.
“Despite tech’s annus horribilis, it appears that lower valuations are actually encouraging investors, more than deterring them,” he said.
Looking at how the ownership of the top stocks on the platform has changed over the year, he notes that most of the tech stocks have seen increases from UK holders, with Amazon, Meta and Alphabet (NASDAQ:GOOGL) all seeing considerable growth, despite plenty of negative headlines and falling shares.
“Investors clearly believe in their long-term value and the premise that big tech stocks are the new defensives. If anything, this correction may well help the tech giants in the long term, and see a more successful 2023 with shareholder support.”
Tesla also is present on the top five most-bought lists for interactive investor (ii), the second largest UK investment platform, owned by Abrdn PLC (LSE:ABDN), as well as at AJ Bell PLC (LSE:AJB).
Not one US stock made it onto the list for Hargreaves Lansdown (LON:HRGV) PLC, the biggest and most established UK platform.
This is despite HL seeing an influx of younger investors in the past few years, bringing down its reported average age from 54 in 2012 to 47 last year. This compared to ii’s average reported age of 57 and AJ Bell's of 43.
At Freetrade, where the average customer is aged around 31 with over a third of customers in that 26-35 age bracket, analyst Gemma Boothroyd wonders whether US tech remaining in vogue is “a case of investors buying into lower prices or is it a restored faith in the sector’s long-term potential”.
Her colleague Dan Lane goes on: “Price corrections are par for the course in markets, and while some stocks may have got cheaper throughout the year, that doesn’t mean investors are giving up on them.”
AJ Bell’s head of investment Laith Khalaf says the presence of Shell (LON:RDSa) and BP was unsurprising after their exceptional year of performance.
“Like many of the other stocks in the leaderboard, they provide a healthy dividend yield, which is likely to be a more prized asset if growth falters,” he said.
“It’s interesting that investors haven’t been driven away from Tesla in a year when the stock price has fallen by 60%, which shows they still buy into the long term investment case.”
UK trends: financial, travel, wind
The year’s investing preferences fall into clear camps, says Sophie Lund-Yates Hargreaves at Hargreaves Lansdown, one of which is a preference for “beaten-up UK financials”.
“The big insurers have seen their share prices drop sharply, partly because of the wider market sell-off, but also because of tough industry conditions as claims increase compared to lockdowns and wider pricing.
“That said, there’s an argument this downwards pressure has been overdone - insurance companies usually benefit from higher interest rates as they can produce a greater level of income from their investments in debt and bond instruments. This time around, the sheer pace of the increases has likely created an offsetting effect.
“The extreme valuation changes are likely to have caught investors’ eyes, as some of these changes will have been taken too far, but that’s not the case across the board. It’ll be crucial to monitor investments to make investors haven’t fallen into the trap of thinking that just because something has fallen far, it can’t fall further.”
Crashed out travel stocks have also attracted lots of interest, as last year, with British Airways owner, IAG, engine maker Rolls and cruise operator Carnival PLC (LSE:NYSE:CCL).
IAG and Carnival have seen a considerable rebound in bookings, but the latter booked heavy losses amid interest payments and fleet upgrades, leading to its debt pile growing.
“Ever since the pandemic started, we’ve seen a real increase in interest for travel stocks. Their volatile journeys over the last couple of years and the fact these brands are tangible and well understood by non-professional investors add to their appeal,” says Lund-Yates.
At eToro, easyJet (LON:EZJ) made its way up the rankings.
At Freetrade, the year’s biggest mover was a UK wind farm investor, Greencoat UK Wind PLC, which has also featured in the top-10 investment trust lists on the more established platforms.
“Green energy is still a big favourite with investors but, with clean energy ETFs sliding down the buy list, Freetrade users are being more selective in the companies they’re backing,” says Boothroyd.
North highlights that 75% of the top 20 most-held stocks at eToro have seen the number of UK clients holding them rise.
“Whilst nothing is guaranteed, investors are seeing this as an opportunity to potentially buy good companies at a discounted price,” he says.
Most bought shares for 2022 on interactive investor
- Lloyds Banking Group PLC
- Rolls-Royce Holdings PLC
- Tesla Inc
- Glencore PLC (LON:GLEN)
- Legal & General PLC
- Polymetal International PLC
- BP PLC
- Barclays PLC (LON:BARC)
- International Consolidated Airlines Group SA (LON:ICAG)
- Boohoo Group PLC
Hargreaves Lansdown most bought YTD (in alphabetical order)
- Abrdn PLC
- Admiral Group (LON:ADML)
- Anglo American (LON:AAL)
- Aviva plc (LON:AV)
- Barclays PLC
- Barratt Developments PLC (LON:BDEV)
- Carnival PLC
- Direct Line Insurance Group PLC
- GSK PLC
International Consolidated Airlines Group SA (LSE:IAG)
- AJ Bell’s most popular investments
- Lloyds Banking Group
- BP PLC
- Legal & General PLC
- Rolls-Royce Holdings
- Tesla Inc
- Shell PLC
- Barclays PLC
- Rio Tinto PLC (LON:RIO)
- Vodafone Group PLC (LON:VOD)
- Unilever PLC (LON:ULVR)
Freetrade top 2022 buys by value
- S&P 500
- Tesla
- All World ETFs (VWRL)
- Apple
- FTSE 100
- Alphabet
- NASDAQ 100 (EQGB)
- Amazon
- Microsoft
- GameStop
(This list is ranked by value of positions and proportion of total value of top 10 customer holdings per position.)
A top-20 list to the end of November from Freetrade showed Tesla at the top of the list, with the FTSE All-World, Glencore PLC and Lloyds Banking Group PLC in mid-teens, and the FTSE 100 in 20th.
eToro most held stocks in the UK - to end of November, 2022
- Tesla Inc
- Amazon.com Inc (NASDAQ:AMZN)
- Nio Inc
- Apple Inc
- Meta Platforms Inc
- GameStop Corp (NYSE:GME)
- Rolls-Royce
- Microsoft Corporation (NASDAQ:MSFT)
- easyJet PLC
- NVIDIA Corporation (NASDAQ:NVDA)