Disclaimer
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
Our latest instalment highlights the most popular buys and sells among UK retail investors in November.
Starting with the US election on 05/11/2024, November got off to a flying start across the Atlantic, but on this side of the pond markets were much more sanguine.
The Trump bump saw US stocks fly, particularly smaller companies. Investors bet that President-elect Donald Trump’s America First agenda would lead to even more American exceptionalism from a stock market standpoint, with potential tax cuts likely to boost company profits.
The small-cap Russell 2000 index soared 10.3% through November, with the S&P 500, its large-cap counterpart, rising 5.4%.
Moves in European stock markets were much more muted. Both the FTSE 100 and FTSE 250 rose c. 1.7%, while the Euro STOXX 50 fell 1.4% thanks in large part to a brewing political crisis in France.
The country’s CAC 40 index fell 2.3% in November as the country’s new, minority government led by Prime Minister Michel Barnier faced push back on its controversial budget.
While the most-bought list was yet again dominated by large, dividend-paying UK stocks, American firms unsurprisingly gave a better showing as investors tried to figure out which had the best prospects. AJ Bell said that there was triple the average value of buys and sells in American stocks the day after the election and more than two times more than the average daily trade volume.
MicroStrategy (MSTR), which owns c. $27 billion worth of Bitcoin, was the beneficiary of a soaring cryptocurrency price, which well outstripped all of the major stock markets in terms of gains in November, rising c. 40%. It’s likely that a Trump Presidency will see lighter-touch regulation for Bitcoin. MSTR’s share price more than doubled in the two weeks following the election before investors took some profits.
Another post-election winner was seen to be Tesla (TSLA), with CEO Elon Musk being a big backer of Trump and likely to be named as co-head of the new Department of Government Efficiency. Despite Trump’s ‘drill, baby, drill’ agenda, Tesla’s shares were also up c. 40% in November.
Investors’ enthusiasm over Nvidia’s (NVDA) status as the winner from the artificial intelligence revolution continued, with shares now up 200% over the past 12 months.
The fourth and final American interloper was Palantir (PLTR), the data analytics firm that has seen its share price rocket 260% this year.
UK dividend stalwarts remained on the list, with investors spying a buying opportunity in the country’s largest high-street bank Lloyds (LLOY), where shares fell c. 15% through November despite better-than-expected results in late October. Lloyds had reported pre-tax profits of £1.8 billion for the July-to-September period, 12% better than analysts had thought.
The insurers Legal & General (LGEN) and Phoenix (PHNX), drugmaker GlaxoSmithKline (GSK), oil major BP (BP) and defence firm Rolls Royce (RR) rounded off the most-bought list.
The most sold list was broadly similar, with some investors looking to take profits from the likes of Rolls Royce, where shares have doubled in the past 12 months, Microstrategy and Nvidia.
The insurer Direct Line (DLG) may have been a late addition to the most sold list, as shares soared after its board rejected a £3.3 billion bid from rival Aviva (AV) that it called “highly opportunistic”. It’s the second time DLG has rejected a takeover bid, after a February approach by Belgium’s Ageas.
Scottish Mortgage (SMT) managed to clamber back onto the top of the charts, after it had been knocked into second place last month. The growth-focused investment trust has a stake in Musk’s Tesla, but also invests in his rocketship maker SpaceX, which recently launched its reusable Starship spacecraft. Other top holdings include Nvidia, Argentina’s ecommerce juggernaut Mercadolibre (MELI) and luxury carmaker Ferrari (RACE).
JPMorgan Global Growth & Income (JGGI) remained popular as a way to get exposure to the rising US market, but with the diversification that a global equity trust provides. JGGI’s ability to draw on its distributable reserves to support annual dividend increases allows the managers to maintain significant exposure to high-growth technology names not present in the more traditional equity income strategies.
Greencoat UK Wind (UKW) fell into fourth place, sandwiched in between two new entries, F&C Investment Trust (FCIT) and JPMorgan American (JAM).
FCIT is the oldest investment trust in existence, having been launched in 1868 to invest in government bonds. Now, it’s a one-stop-shop investment portfolio, characterised by longstanding manager Paul Niven’s highly diversified, yet actively managed global equity strategy.
Typifying investors’ urge to jump further onto the US equity bandwagon, JAM provides a blend of value and growth investing alongside an allocation to small-caps, areas that performed well in November. The trust makes good use of its ability to buy back and issue shares in order to maintain a narrow discount or premium, which we believe should give investors comfort that the risk of a large discount developing is low.
UK investors continue to believe that America is the only show on the road when it comes to investing in equities, a belief that seems to have been bolstered by the re-election of Donald Trump. Time will tell if they’re making the right call.
All data is correct to 03/12/2024, unless stated otherwise.
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