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AMC, GameStop and Tesla stock in favor as UK investors go global

Electric carmaker Tesla and video games retailer GameStop were the most popular overseas-listed companies in the first half of 2021

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Elon Musk has garnered plenty of fans in the UK

Another US earnings season begins this week but interest from across the Atlantic has never been higher, as UK investors have significantly increased their backing of Wall Street stocks over the past year.

At the end of May in 2020, around 4.4% of retail investor assets were held in overseas-listed shares, only up slightly from the 4% a year earlier.

But as of May 2021, this had surged to 10.8% of total assets.

These figures are from AJ Bell, one of the UK’s three largest investment platforms, but numbers from its rivals echo this trend, with US tech giants mixing it with ‘meme stocks’ such as GameStop Corp (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) in the best-selling stocks list for the first half of the year.

At Hargreaves Lansdown, the largest of the three, new share purchases by clients of internationally listed shares topped 30% in the early months of 2021, up from around 10% at the end of 2019, as seen in the below chart.

HL overseas stocks as % of new share purchases
Source: Hargreaves Lansdown

 

Interactive Investor also confirmed higher levels of international trading over the last year or so, a spokeswoman told Proactive, with new international trading records broken at various points earlier this year.

On commission-free trading platform Freetrade, the split in client assets is even more pronounced, with a spokesman saying around 45% is in overseas-listed securities, while June this year saw its largest ever proportion of US orders compared to UK at 73%.

Orders in July at Freetrade have been split 43% towards UK listed securities and 57% US-listed ones, compared to 49%- and 51% respectively in July last year.

The reasons for the rise among the big platforms are not certain but come amid a rise in interest in the stock market from younger investors and dramatic headlines about the meme stocks earlier this year.

“Broadly speaking, international stocks have been generating more interest from UK investors in recent years,” said Laith Khalaf, financial analyst at AJ Bell.

He said in “large part” this interest be put down to the stellar performance, and the familiarity, of some of the big US tech stocks.

“In the last year we’ve also seen the dramatic rise of Tesla shares and the meme investing craze which propelled a couple of US companies into the spotlight.

“Investors tend to focus on their home market when it comes to picking shares and this makes sense as many of the businesses will be well known to them, but until recently the UK had been a laggard amongst international markets and that may also be driving some investors to consider investing overseas.”

In the top 30 lists from the three investment platforms, electric carmaker Tesla Inc (NASDAQ:TSLA) and video games retailer GameStop were the most popular overseas-listed companies this year.

Also highly sought after were cinema operator AMC, China-based electric vehicle manufacturer NIO Inc (NYSE:NIO), Apple Inc (NASDAQ:AAPL) (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN).

US earnings season begins with numbers from PepsiCo Inc (NASDAQ:PEP), JPMorgan Chase & Co (NYSE:JPM) and Goldman Sachs (NYSE:GS) today.

At Freetrade, a spokesman attributed part of the swing to US stocks being that “UK markets have been relatively dull in comparison to the US over the last year or more”, and that more UK assets were held in exchange-traded funds, which were traded less often.

After a first-quarter US earnings season that was widely seen as exceptional, with roughly nine out of every 10 companies comfortably beating expectations, Richard Hunter, head of markets at Interactive Investor, said there is “more scope for disappointment rather than positive surprise” in the Q2 numbers.

“The technology sector will be an interesting test of this optimism. Despite some recent share price difficulties resulting from a switch out of growth and into value stocks based on inflationary fears, the Nasdaq has not only regained its ground but has also pushed to new record levels.”

After the banks get things going this week, IBM kicks things off for the tech industry next Monday, followed by others such as Netflix (NASDAQ:NFLX) on Tuesday, Intel NYSE:INTC), Snap (SNAP) and Twitter (TWTR) on Thursday, Tesla on Monday the 26 July, before trillion-dollar due Apple and Google parent Alphabet (GOOG) on the following day, and fellow trillion dollar club members Microsoft (MSFT) and Facebook (NASDAQ:FB) on Wednesday and Amazon on Thursday.

Top 30 best-selling shares on Interactive Investor so far in 2021 (international co's in bold)

  1. Argo Blockchain PLC
  2. Rolls Royce Holdings
  3. International Consolidated Airlines Group (IAG)
  4. Lloyds Banking Group
  5. BP
  6. Glaxosmithkline
  7. ITM Power
  8. Tesla Inc
  9. EasyJet
  10. Glencore PLC
  11. Vodafone Group
  12. Boohoo Group PLC
  13. Tui AG
  14. GameStop Corp
  15. Barclays PLC
  16. Avacta Group
  17. Cineworld Group
  18. Centamin PLC
  19. Unilever PLC
  20. Eurasia Mining
  21. Omega Diagnostics
  22. Greatland Gold
  23. AMC Entertainment Holdings
  24. Novacyt
  25. Legal & General Gp
  26. Tesco
  27. Apple Inc
  28. Ceres Power Hldgs
  29. NIO Inc
  30. Synairgen

Top 30 on AJ Bell

  1. Argo Blockchain
  2. Glaxosmithkline
  3. BP
  4. Lloyds
  5. Rolls Royce
  6. IAG
  7. Gamestop
  8. Unilever
  9. Tesla
  10. Aviva
  11. Royal Dutch Shell
  12. EasyJet
  13. AMC Entertainment
  14. Vodafone
  15. ITM Power
  16. L&G
  17. Avacta
  18. TUI
  19. Cineworld
  20. Tesco
  21. AstraZeneca
  22. Barclays
  23. National Grid
  24. Apple
  25. Carnival
  26. Boohoo
  27. Sylvania Platinum
  28. Greatland Gold
  29. Omega Diagnostics
  30. Rio Tinto

Top 30 on Hargreaves Lansdown (in alphabetical order)

Top 20 shares and indices on Freetrade

  1. GameStop
  2. AMC Entertainment
  3. Tesla
  4. S&P 500
  5. NIO
  6. Argo Blockchain
  7. Churchill Capital IV (merging with Lucid Motors)
  8. Apple
  9. Palantir
  10. FTSE 100
  11. Virgin Galactic
  12. Amazon
  13. Global Clean Energy
  14. BlackBerry
  15. FTSE All World
  16. NASDAQ 100
  17. Riot Blockchain
  18. Coinbase
  19. Clover Health
  20. BP

Before a UK investor can buy US-listed shares, they will need to complete an IRS W-8 form, which can be done online if you are a UK resident and your account is in your individual name. This saves UK investors up to 30% tax on US and Canadian income, and is valid for three years.

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