Lloyds Banking Group was the most bought UK stock by retail investors on Freetrade’s app in January, though it was only number 13 amongst global stocks.
“Rate rises are good news for banks ’net interest margins - a prospect not lost on investors buying into Lloyds, the UK’s largest mortgage lender,” said Dan Lane, Freetrade’s senior analyst.
UK instruments surged in popularity, according to the app’s monthly Retail Investor Barometer, which looks at the most popular buys among its 1.1mln UK users.
While younger investors largely kept faith with tech stocks, the growing investment in passive ETFs suggests they are diversifying their portfolios, the trading app said.
“And if it’s dividends you want, arguably the UK is a much more friendly place to find them than across the water.
“High growth firms tend to put cash back into that growth,” Lane commented.
He highlights the iShares UK Dividend ETF, which saw significant growth in buy orders, making it the most popular ETF behind trackers following the S&P 500 and the FTSE100.
The ETF was the second most popular UK stock - just one place behind the London-based Lloyds on the overall leader board.
US stocks Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL) retained their top two spots, respectively, as most purchased on Freetrade in January.
Meanwhile, fellow tech stocks Microsoft Corp, Alphabet Inc (NASDAQ:GOOG), Netflix Inc (NASDAQ:NFLX), and Meta Platforms Inc (NASDAQ:FB) ranked 3rd, 7th,9th, and 11th respectively.
Meme-stocks AMC Entertainment Holdings (NYSE:AMC) Inc and Gamestop Corp came in at 8th and 15th.
“A heady mix of rate rises and post-pandemic life getting closer wasn’t enough to pull the plug on the tech party altogether, although it did prompt a reassessment of how diversified we all were,” said Lane.
Amazon.com, Inc kept its place at fourth spot, while Boohoo Group PLC (AIM:BOO) was 12th, with BP PLC (LSE:BP.) just missing out.
December’s rising investment in US-focused exchange-traded funds (ETFs) continued into January, with both Vanguard’s S&P 500 accumulation and income-distributing tracker ETFs now firmly established among the most popular investments in 5th and 6th place respectively, it said.
“These ETFs climbing the buy list is a clear sign of investors wanting a much broader exposure to US life after lockdown,” Lane added.