Most popular shares in HL Stocks and Shares ISAs in 2024

Most popular shares in HL Stocks and Shares ISAs in 2024

• Lloyds Bank tops list of the most popular buys in HL Stocks and Shares ISAs in January.
• Retail investors are riding the AI wave, investing in Nvidia, Microsoft and AMD.
• Defence company, BAE Systems has been in demand amid geopolitical tensions.
• Surge in price of uranium sparks enthusiasm for Yellow Cake.
• Glencore remains popular as investors eye up its role in the green transition.
• Investors focus on oil prices with BP making the top ten of most popular picks in ISAs.
• Bargain hunters snap up shares which have been hit by losses this month, with enthusiasm for JD Sports.

Susannah Streeter, head of money and markets, Hargreaves Lansdown:

‘’The top ten of greatest share hits since the start of the year is a big band ensemble, with star names like Nvidia and Microsoft looming large, Yellow Cake taking centre stage, and reliable backing singers like Lloyds and BP still drawing big crowds. 

The FOMO effect among retail investors has been super-strong since the start of the year, with chip makers Nvidia, AMD and Microsoft high on the list of most popular buys in ISA stocks and shares. As Wall Street has reached fresh heady heights, boosted by a frenzy for all things AI, investors clearly feared missing out on the wave of demand for artificial intelligence products and services. With valuations sky high, the longer-term trajectory of AI hard to map, and uncertainty about when interest rate cuts will come, investors should be braced for some volatility ahead.

Retail investors are also keen to get a slice of AIM-listed Yellow Cake for their portfolios, given that the company is believed to hold around 20% of global supply of uranium, and it’s seen a surge in its price.  Uranium has been one of the best performing commodities over the past year, as more governments have shown willingness to embrace nuclear energy to help reach net zero targets. With China scrambling to sign long-term leases on mines to secure continued supply, after years of under-investment globally, it appears demand for uranium isn’t likely to ease any time soon.

Since the beginning of 2024, as geopolitical tensions have crept higher, there continues to be high interest in BAE Systems. As violence has widened in the Middle East, with attacks by Houthi rebels continuing, a US/UK led force targeting their bases and Ukraine appealing for more weapons to repel Russia, there is an expectation that military budgets will keep expanding. This has been reinforced by defence chiefs in Nordic countries and the UK, calling for better military preparedness over the next decade.

Oil prices are hovering near three-month highs as the prospect of conflicts intensifying in the Middle East have prompted fresh supply worries. Continued attacks by Red Sea rebels on tankers are also raising concerns. With the US economy also showing continued signs of resilience, with the latest growth snapshot brushing away recession fears, there are forecasts for strong global growth in crude demand this year.  Amid expectations that crude prices will stay elevated in the months to come, retail investors have shown appetite for BP shares, pushing the company into the top ten of net buys for ISA Stocks and Shares portfolios.

There is also a drive to add stocks offering more stability to portfolios, with Lloyds Bank topping the list of most popular stocks. It’s considered to be a bellwether for the UK economy, and with the latest snapshot data showing growth increasing in the services industry and consumer confidence rising to two-year highs, there is hope that there are brighter economic skies ahead. Although interest rate cuts are eyed on the horizon, which will affect net interest income, if the UK avoids a hard landing, concerns about bad debt piling up should ease off.  There also appears to have been renewed appetite for Phoenix Group holdings, with investors likely to have been attracted by its dividend yield of more than 9%. Sentiment towards the company has lifted following its announcement in November that it was lifting its full-year cash generation targets. It came after completing the funds merger of its Standard Life and Phoenix Life businesses into a single entity, bringing together 8 million policies. 

Glencore is a popular pick among retail investors despite the short-term headwinds in the sector. Headline numbers have pointed to a significant drop in profits over the first half for the company, as broad commodity prices have come back down to earth following a surge in 2022. But, longer-term, there’s still plenty of scope for healthy profits. It has a large industrial portfolio producing metals and minerals, which are essential for global efforts to reduce carbon, and looks well placed to take advantage of the energy transition. It also has added diversification from its marketing business which acts as a global commodity marketplace.

Retail investors are always keen to try and snap up a perceived bargain, and JD Sports’ dramatic slide in fortunes this month may be partly behind its popularity. The shine came off the crown of the self-proclaimed King of Trainers after it admitted that sales had grown by less than expected. It’s been bit by discounts by rivals in key markets, as companies strive to keep tills ringing as consumers belts have been tightened. However, the muscle of big names like Nike, which JD Sports relies on, should beef up again, as cost-of-living headwinds subside as big brand power is unlikely to be constrained for long.

While individual shares remain a popular pick for HL Stocks and Shares ISA portfolios, it’s important for investors to abide by a golden rule of investing – diversification. It’s sensible for a pick of funds across different sectors and geographies to be the main body of any investment, with shares chosen alongside. The funds should be top billing, but in any line-up there’s always space for individual stocks to play an interesting part in a portfolio.’’ 

Source: Hargreaves Lansdown