Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
This summer, the UK has been enjoying its time in the sun. Not just through good weather but also for the stock market, which reached an end of day high on 24 July and an intraday high on the 31st. Some investors may be considering how to get a piece of the pie.
Adding to the appeal of the home market is a weakened US dollar, creating currency risk for UK investors. In US dollars, the S&P 500 has gained over 8% this year while in sterling terms the gain shrinks to under 2%. In comparison, the FTSE 100 has gained over 14% so far this year.
So, how can investors access the UK market and how have AJ Bell’s investors already been taking a bite? We took a look at the most popular UK investments for AJ Bell customers.
Casting a wide net with index funds
The most common way for AJ Bell customers to invest in the UK has been through index funds and the Vanguard FTSE 100 index fund was AJ Bell’s most purchased UK product for July.
Slightly less popular than the FTSE 100, but almost equal in returns this year at 13.3%, has been the FTSE All Share. The FTSE All Share is made up of 548 companies listed on the London Stock Exchange, allowing for a wider breadth of exposure than the FTSE 100. It includes 98% of the UK’s market capitalisation, according to the index report.
The most popular tracker to access the index for AJ Bell’s investors has been the iShares UK Equity Index fund.
Taking the active approach
In general, active managers have struggled to beat the UK index over an extended period in recent years. According to AJ Bell’s latest report, Manager vs Machine, just 27% of UK active fund managers have delivered better returns than the index over a five-year period. But the most popular actively managed fund with AJ Bell investors in July has managed that, and not just by a little.
The Artemis UK Select fund has beaten the FTSE All Share by 87 percentage points in the past five years, according to FE Fund info, with a total return of 161% compared to the FTSE All Share’s 74%*. The fund invests in a much smaller group of companies than the All-Share index, limiting its share picks to between 40 and 60 companies.
It has its largest exposure to financial companies, with a trio of banks: Barclays, Standard Chartered Bank and NatWest Group in its top holdings. The fund can also short stocks (or invest money to profit from the share price of a company going down, instead of up), which allows for potential strong performance when the UK is struggling as well.
AJ Bell’s favourite funds list also highlights a group of actively-managed funds invested in the UK, including BlackRock UK Special Situations, Royal London Sustainable Leaders, Gresham House UK Smaller Companies.
Using investment trusts
Investment trusts are a unique fixture of the UK investment market, and a popular way to gain exposure. Investment trusts are similar to other funds because they invest in a group of stocks or other investments, but operate slightly differently because they are their own company listed on a stock exchange. So, when you purchase an investment trust, your money isn’t going directly into buying shares of all the stocks a fund holds, but into the share price of the trust itself, as a company.
In July, UK-focused investment trusts were two of the top five most-bought trusts by AJ Bell customers. This included Law Debenture and Temple Bar Investments, which have had a share price total return of 13.9% and 25.4% this year, respectively. In the past five years, Law Debenture has returned 127.9%, while Temple Bar has returned 184%, both outpacing the FTSE All Share’s 74% gain*. However, of course, past performance does not guarantee that this pattern will continue in the future.
AJ Bell’s investment trust select list also features a few trusts that invest in UK companies, including abrdn UK Smaller Companies Growth, Fidelity Special Values, and City of London.
Choosing your own stocks
Nine of the top 10 most-purchased stocks in July by AJ Bell customers were UK-listed companies, with Nvidia as the only exception. Oil giant BP was the top pick for investors, followed by pharmaceutical company GSK and utility company National Grid.
| The Top Ten most-bought shares in July by AJ Bell Customers | |
|---|---|
| Company | Registered Country |
| BP | England |
| GSK | England |
| National Grid | England |
| Taylor Wimpey | England |
| Persimmon | England |
| Greggs | England |
| Tesco | England |
| Marks & Spencer | England |
| Nvidia | United States of America |
| Metals One | England |
Source: AJ Bell
Importantly, just because a stock becomes popular, doesn’t mean it will stay in favour forever or that’s it a good idea to buy it. While some investors may take the strategies of hopping on the trend, others search around for undervalued stocks.
For those who like to hunt out a bargain, a recent dig into the companies in the UK market with the lowest price to earnings ratios found that WPP, International Consolidated Airlines, and EasyJet were the cheapest FTSE 100 stocks when using their price to earnings ratios.
*Data accurate to 5 August, including fund charges but excluding platform or transaction charges
Hannah Williford: Content Writer
Hannah joined AJ Bell in 2025 as an investment writer. She was previously a journalist at Portfolio Adviser Magazine, reporting on multi-asset, fixed income and equity funds, as well as macroeconomic impacts and regulatory changes...
