Defensively positioning was a notable trend for savers rejigging their ISAs and SIPPs in the past month, though growth-focused Scottish Mortgage Investment Trust PLC (LSE:SMT) kept its place at the top of the list.
This was part of a dichotomy among trends last month among private investors using Interactive Investment, the UK’s second-largest fund platform.
While the popularity of FTSE 100-listed Scottish Mortgage remains unwavering, other growth-focused investment trusts became less popular, with Polar Capital Technology Trust PLC (LSE:PCT), Allianz Technology Trust PLC (LSE:ATT), Edinburgh Worldwide and Baillie Gifford US Growth Trust all dropping out of the platform’s top 10.
“Investors are in two camps,” said Kyle Caldwell, ii’s collectives specialist. “Some are viewing defence as the best form of attack at a time when there’s no shortage of headwinds: the war in Ukraine, inflation at its highest level in decades and interest rates moving higher.
This, he said, was reflected by investors’ hunger for RIT Capital Partners (LSE:RCP), Ruffer Investment Company Ltd (LSE:RICA) and Personal Assets Trust (LSE:PNL), which all entered ii’s 10 most-bought trusts for March, while Capital Gearing Trust PLC (LSE:CGT) maintained its place on the leaderboard.
All four of this wealth-preservation quartet, which prioritise protecting investor capital, gained in attractiveness as investors search for inflation protection and portfolio diversification, all coming in the run-up to the ISA deadline on 5 April.
The four were among a list of seven suggested by analysts at Investec that offer “genuinely differentiated exposure”, along with a mix of long-term consistency, outperformance during downturns and protection from the big shifts taking place in markets.
Other investors have been “leaning into volatility,” said Caldwell, shown by the including the second successive month in the top 10 for JPMorgan Russian Securities.
Interest in commodities has increased, with BlackRock World Mining Trust continuing to prove popular after entering the investment trust leaderboard in January, and JPMorgan Natural Resources a new entry to the open-ended funds table, which continued to be topped by Terry Smith’s Fundsmith Equity fund.
Says Caldwell: “Commodities have been on a tear for the past two years, with some predicting the early stages of a new ‘supercycle’ for the asset class – driven by the global green revolution, as major economies strive to decarbonise.”
He said inflation concerns will have been another factor behind the popularity of the commodities funds and likely to have been a driver behind Greencoat UK Wind entering the top 10 trust table.
The wind farm investor aims to provide investors with an annual dividend that increases in line with RPI inflation.