SIPP Investing: 10 Most-Bought Stocks

The 10 most-purchased UK stocks in SIPPs this tax year were split equally between FTSE 100 dividend payers and more speculative AIM offerings

David Brenchley 6 April, 2018 | 1:17PM

Lloyds Bank branch, SIPP investments, UK stocks, GlaxoSmithKline

Popular dividend-paying names were some of the most bought in SIPPs this tax year to 31 March, according to data from The Share Centre compiled for Morningstar.

High-street lender Lloyds (LLOY) and drug maker GlaxoSmithKline (GSK) have been the two most-purchased companies by investors for their self-invested personal pensions since 6 April 2017.

The pair was also the fourth and sixth most-sold SIPP investments respectively. Also in the list of top 10 buys were oil majors Shell (RDSB) and BP (BP.), in fifth and 10th place respectively.

The case for banks in the current climate has been made by many, with an environment of interest rate rises generally seen as helpful for the sector. This should have the effect of boosting banks’ net interest margins.

At the same time, balance sheets have been repaired and dividend payments are on the up. Lloyds recently hiked its payout 20% to 3.05p – a yield of over 4.5% - and announced a £1 billion share buyback, which should support the share price.

The oil majors have cleaned up their businesses, too, by clashing costs. They have also been boosted by a more stable oil price. Both BP and Shell currently yield around 6% and have buyback programmes in place as well.

Scottish Mortgage (SMT), the Morningstar Gold Rated investment trusts run by Baillie Gifford’s James Anderson and Tom Slater, is an unsurprisingly popular investment. It sits in eighth place in our list and has served investors well in recent years.

Its exposure to high-growth tech firms like Apple (AAPL), Amazon (AMZN) and Facebook (FB) has seen it return an impressive 22% annualised over five years. The share price is up 350% since the end of 1999 and sevenfold since bottoming out after the dotcom crash in 2001. As a result, last year it became the fourth investment trust to enter the FTSE 100.

Popular AIM Stocks

IQE (IQE), UK Oil & Gas (UKOG) and Ascent Resources (AST), three smaller AIM-listed stocks, also made both the most-bought and most-sold lists. They were the third, fourth and sixth most-purchased respectively.

Many hedge funds are currently betting against chip maker IQE after a long winning run. That came to an end towards the tail of 017 and shares are down a third in the past five months; though are up 23% since February’s six-month low.

UKOG has behaved like a typical AIM resource, running up quickly before paring back to the level it began, while Ascent has been on a steady decline since a high of 3.522p in early 2017. It’s now sub-1p.

Engineering materials provider Versarien (VRS) comes in at ninth most bought, having seen the share price finally show signs of movement in November after more than four years trading in a range between 10p and 35p. The stock has since risen as high as 112p and currently sits at 78p.

The catalysts for the gains have been a string of collaboration announcement with global companies, including Team Sky, though most have remained unnamed. House broker WHIreland sees the announcements as positive.

Its most recent note to clients said the news “illustrates Versarien’s progress in building its position in the exciting yet embryonic advanced materials market”.

Our list is rounded off with £4 million tiddler Regency Mines (RGM), which has, operations in the US, Papua New Guinea and Greenland. The nickel and coal miner has seen its share price more than half to 0.48p since the start of the current tax year. The share price has been as low as 0.015p in the recent past.

Still, broker Align Research reckons Regency is “on the brink of beginning to further develop its key assets so that more value can be rapidly added”. It has an initial target price of 2.41p but notes that this could be “significantly increased” should the company choose to increase its stake in its coal mine in Alabama from 20% to 100%.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Amazon.com Inc1,918.00 USD-1.35
Apple Inc217.65 USD-1.08
Ascent Resources PLC0.83 GBX10.00-
BP PLC567.00 GBX2.07
Facebook Inc A162.93 USD-1.86
GlaxoSmithKline PLC1,531.40 GBX3.07
IQE PLC88.45 GBX-1.72-
Lloyds Banking Group PLC61.86 GBX0.44
Regency Mines PLC0.43 GBX0.00-
Royal Dutch Shell PLC B2,615.50 GBX2.47
Scottish Mortgage Ord540.70 GBX2.33
UK Oil & Gas Investments PLC2.03 GBX-1.22-
Versarien PLC177.50 GBX6.29-
About Author David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk