One of the most pronounced trends in the retail investor market in the UK in recent years has been the unprecedented investment and trading boom. Echoing trends in countries such as the US and spurred on by the proliferation of apps and platforms that make it easier for “regular” people to own stocks, more people than ever are now trading and investing on their own in the UK.
While we all know that retail investment is enjoying something of a golden age right now, what might be less clear to some is exactly how Brits are choosing to invest their cash. Let’s take a closer look at the top investment trends among the UK public in 2022.
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Equity funds
There’s no doubt about it, equity funds remain the most popular investment vehicle for swatches of the UK population. Equity funds are funds that are usually backed by investment banks and which invest in a mixture of assets on behalf of clients. Typically, equity funds will consist mostly of stocks, with a percentage of bonds and perhaps some other assets such as commodities just to keep things mixed. Some of the most popular equity funds in the UK have billions of pounds invested in them, with tens of thousands of people participating.
CFDs
CFDs, or Contracts for Difference, are an interesting type of asset. As this expert guide to what is CFD trading nicely explains, these are instruments that allow traders to speculate on the future price movements of assets without owning the asset outright. Instead, the trader can open a large position on an asset with a fraction of the funds that would usually be required, allowing them to attempt to make larger profits on smaller price movements. The element of risk still remains however and should be considered. The likes of The Guardian and The Telegraph have covered the huge and growing popularity of CFDs in the UK, which looks set to rise to a whole new level in 2022.
ESGs
One trend that few in the City of London saw coming was the huge importance that retail investors now attach to ethical, sustainable investments. Known as Environmental, Social, and Governance, ESG describes criteria that a growing proportion of investors are using to choose assets that are not making the world a worse place. Typically, an ESG fund will contain stocks in companies that produce green energy, practice sustainable farming, or are known to pay suppliers a living wage. This way, companies can be incentivized to make more ethical choices in order to attract future investment.
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Crypto
Let’s not forget about crypto. Although the likes of Bitcoin and Ethereum have taken a nosedive recently, it seems that the faith of Brits has not yet been visibly shaken. About 3.3 million people in the UK now own a cryptocurrency, putting the country near the top of the global league tables when it comes to per capita crypto ownership. If current investments trends continue (which is anything but certain), crypto could come to dominate the retail investment landscape in 2022.
These are some of the main ways that Brits are choosing to invest their money in 2022. How does your investment strategy compare?