Top of the stocks: most bought and sold stocks in May

May saw the election of the first ever American Pope – and the month also hailed the return to form of US stock markets, with a continued recovery in bourses as US President Donald Trump backed down from his tariff threats – by David Brenchley

A trade deal with the UK and tariff ceasefire with China calmed nerves and allowed the S&P 500 to return 5.6% in US dollar terms (4.1% in sterling). Financial Times columnist Robert Armstrong coined a new acronym to describe the current burst of animal spirits: the TACO trade, meaning Trump Always Chickens Out.

This led to the best-performing industry group in the US being Automobiles & Components, according to FE fundinfo, with share prices in that group rising c. 20% during May. They were closely followed by the Semiconductors & Semiconductor Equipment industry group, which rose c. 17% on the back of strong results from Nvidia (NVDA).

UK markets did well, with small- and mid-caps performing better than their large-cap brethren. The FTSE AIM 100 rose 6.8% and the FTSE 250 up 4.7% versus a 3.8% gain for the FTSE 100. Europe’s STOXX 600 rose 5% in euro terms (4.2% in pounds) and Japan’s Nikkei 225 was up 4.2% (3.5% in pounds).

With this backdrop, we round up the stocks that were popular – and not so popular – with investors in May.

Top 10 most bought and sold shares in May

These were the most (and least) popular shares with UK retail investors on four of the largest investment platforms last month:

Source: Hargreaves Lansdown, AJ Bell, Bestinvest and interactive investor

US growth rebounds

As mentioned in the intro to this article, chipmakers were back on the menu for investors in May, meaning Nvidia jumped up the table to take top spot. Revenue continued to soar for the Santa Clara-headquartered behemoth, up 12% on a quarterly basis and 69% on a yearly basis. Investors clearly thought that the c. 37% fall in the share price between January and April was overblown, with shares having risen more than 50% from their lows.

In addition, Strategy (MSTR), formerly named MicroStrategy, returned to the list after a one-month hiatus. The company is ostensibly a software developer, but has been compared to a leveraged bitcoin exchange traded fund on account of its large holdings of the cryptocurrency. Strategy currently holds 580,955 bitcoins, currently worth c. $62 billion.

Aside from Tesla (TSLA), the rest of the list has a strong UK equity income fund feel, with the likes of insurers Legal & General (LGEN) and Aviva (AV), high street bank Lloyds Banking Group (LLOY) and oil major BP (BP) yielding between 4% and 9%.

Finally, the defence theme continues to roll on unabated, with Rolls-Royce (RR) and BAE Systems (BA) still expected to benefit from higher military budgets from European nations.

Shares in Marks & Spencer (MKS) fell c. 16% between mid-April and mid-May, after it came to light that the firm was victim of a cyber attack on the Easter bank holiday weekend. It seems that many investors saw this as a buying opportunity, with shares having risen c. 8.3% since.

Same old, same old

Eight of the 10 most-bought shares were also in the most-sold list, the only two in the latter and not the former were British Airways owner International Consolidated Airlines (IAG) and the asset manager M&G (MNG).

IAG had plunged c. 40% between February and April. Seemingly, investors were worried about the possibility of a US recession finally surfacing, which might dampen demand for holidays and business flights. Still, IAG shares have bounced back and remain around double the price they were this time last year, potentially causing shareholders to take profits off the table.

Profit-taking could also be seen at M&G, which has bounced back from a c. 25% fall by surging c. 40% since early April and, despite throwing off a c. 8.4% dividend yield, now trades around its record high.

Top five most bought investment trusts in May

Moving onto investment trusts, May’s most-purchased trusts mainly saw more of the same, though we did have one new entry:

Source: Hargreaves Lansdown, AJ Bell, Bestinvest and interactive investor

This is the 10^th edition of the most-bought stocks article and in that time Scottish Mortgage (SMT) has been in the top two on the investment trust list every single time. It took first place for the fourth month running in May.

SMT was hit by the sell-off in US tech stocks at the start of the year, eventually falling c. 28% in share price terms until bottoming out in early April and recovering some of its lost ground.

Despite negative share price returns so far this year, JPMorgan Global Growth & Income (JGGI) and F&C (FCIT) remain popular with investors. The former offers both income and growth, while the latter, the oldest investment trust in existence, provides access to both listed markets as well as private equity.

UK markets have performed well so far this year, perhaps encouraging investors to invest in their home market. Mirroring the popularity of the income-producing stocks, City of London (CTY) is another evergreen name on our list, but Temple Bar (TMPL), managed by Nick Purves and Ian Lance at Redwheel, also makes it in this time.

Performance has been impressive, TMPL having returned more over the past three years than the other trusts on the list, up c. 50% in that time. Top holdings include Shell (SHEL), Natwest (NWG) and Aviva.

Tarriff turmoil part two?

Looking forward, June certainly looks set to be positive for stocks, with the S&P 500 and Nasdaq indices remaining on the up. However, markets remain at the whim of President Trump’s unpredictable Truth Social posts.
Don’t forget, too, that the current pause in tariffs is set to end at the start of July, so it’s possible we could see some nerves come back towards the end of the month.

Disclaimer

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.