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UK investors are flocking to passive funds as only two of Interactive Investor top 10 most-bought investments in August are active funds in a list where Nvidia (NVDA) is the most-bought stock.
Fundsmith Equity (0P0000RU81.L) has dropped from the top 10 for the first time since Interactive Investor began tracking its most-bought investments in 2018. Manager Terry Smith faces the headwinds of global stock market returns being heavily influenced by a small number of US technology companies.
Vanguard (VUSA.L) passive funds took the lead, with the asset manager taking five of the top 10 slots. The only active funds that made it into the top 10 in August were the Royal London Short Term Money Market (0P0000NRQO.L) and Jupiter India (0P00018LFD.L).
The L&G Global Technology Index Trust (0P0000XAFS.L) was the most-bought investment last month on the platform as “many investors are positioning themselves for technology shares to continue their fine form,” Kyle Caldwell, funds and investment education editor at Interactive Investor, said.
In second place is Vanguard LifeStrategy 80% Equity (0P0000TKZM.L) and Royal London Short Term Money Market came in third.
Looking at the top stocks, August proved to be a turbulent month for equities, with volatility sweeping across markets. Among the companies navigating this choppy environment was Nvidia, which released its latest quarterly update during the month.
Despite the semiconductor giant surpassing analysts’ expectations, the heightened market volatility led to a decline in its share price. Nevertheless, Nvidia continued to be the favoured pick among investors, maintaining its position as the top choice in the US market.
In contrast, Tesla (TSLA), once a stalwart in the rankings, saw its fortunes shift dramatically. The electric vehicle manufacturer reported disappointing Q2 2024 earnings, which triggered a sharp reassessment by investors. As a result, Tesla plummeted out of the top 10 list in August, a significant drop from its third-place standing in July.
Read more: Trending tickers: Nvidia, Rolls-Royce, Tesla and Intel
Meanwhile, Amazon (AMZN) and HSBC (HSBA.L) made their way onto the list, signalling renewed investor interest. Moving in the opposite direction, easyJet (EZJ.L), which had previously been a popular choice, dropped out of the rankings.
Richard Hunter, head of markets at Interactive Investor, said: “August started shakily and ended strongly, providing some buying opportunities as the month progressed either to add to holdings or to buy on the dip, and ii [Interactive Investor] customers took full advantage.