- GameStop Corp. (NYSE:GME) remains a top pick among HL clients a year on from meme stock frenzy
Q4 2021 hedge fund letters, conferences and more
- Meme stock AMC Entertainment Holdings Inc (NYSE:AMC) also appeared frequently in top of the stocks list over the past year
- HL strategy of diversification paying off as clients branch out into funds to reduce risk
- Clients aged 18-29, hold around 12.5% of their portfolio in funds nine months after joining as a share trader.
Investor Interest In GameStop
"The FOMO effect has kept meme stocks at the top of stock picks over the last year, with some investors still fearful of missing out on a fresh wave of speculation in companies at the centre of social media chatter. Far from being a flash in the pan, surges in interest in shorted companies continue.
A year ago today, Gamestop shares was falling spectacularly from the heady heights reached during the frenzy of share purchases. They opened down 50% when trading began on Wall Street, as investors who had been riding the wave of speculation accelerated the offloading of their holdings.
Intense interest had been sparked in the meme stock after it was among the companies targeted by an army of retail investors in January in a bid to create big losses and for short sellers. The revenge saga kept bubbling up in the months following and Gamestop has stayed in the top ten of most popular stocks among HL clients for every month bar two in 2021. It dropped out of the top of the stocks list in October and November in 2021 before returning in December and was still among the most popular picks among clients in January. Another meme name, the cinema chain AMC Entertainment also was a regular feature in the most purchased shares list throughout 2021.
The conditions which led to a fire being lit under some stock prices are prevalent and that’s partly why the trend has continued albeit on a gentler path. Savings have been accumulated as holidays have been cancelled, commuting costs eliminated and social lives extinguished. Trading is still en vogue as a new form of entertainment among younger investors, and an increasing number are getting investment tips from posts on social media platforms.
Crypto Assets Surge In Value
Over the past year crypto assets have also surged in value, along with some rollercoaster drops along the way, as coins and tokens were hyped in posts, and the ongoing restrictions imposed by the pandemic has meant social media has become even more of a drug for the bored and socially constrained.
Almost in the shadows of the rise of crypto and meme stocks are the far more positive and demographically important permanent shifts: the average age of people investing for the first time is falling and there is an unstoppable shift to digital trading, opening up the financial markets to new retail investors, which is an encouraging trend. But it’s vital that they are listening to regulated bodies, or at the very least altruistic industry experts with years in the industry, rather than influencers targeting a quick buck.
Over the course of 2021 we have urged investors not to chase the hot stocks but to pursue a well thought out long term investment strategy. We are encouraging them to diversify their holdings through client communication and risk warnings are fed straight through to their app and online accounts. That’s led to significant success in helping clients diversify their holdings to improve their financial resilience.
Looking back further than those that started investing with us during the pandemic, almost a third of clients that joined us three years ago with a share purchase as their first transaction have now diversified to include at least one fund, ETF, or investment trust in their portfolio.
For example, clients that joined in 2020 and bought a share as a first purchase have increased from holding an average 6% of their portfolio in funds in their first month to 10% by their ninth month with us, and if we narrow that to look at those aged 18-29, we see that they have progressed further still on their diversification journey, holding around 12.5% of their portfolio in funds nine months after joining as a share trader.’’
Monthly top shares by number of net buys, alphabetical:
| January 2021 | February 2021 | March 2021 |
| AMC Entertainment Holdings Inc | AMC Entertainment Holdings Inc | Apple Inc |
| easyJet plc | BP Plc | Cineworld Group plc |
| Gamestop Corporation | Churchill Capital Corp IV | Gamestop Corporation |
| International Consolidated Airlines Group SA | Gamestop Corporation | International Consolidated Airlines Group SA |
| ITM Power plc | GlaxoSmithKline plc | National Grid |
| Lloyds Banking Group plc | International Consolidated Airlines Group SA | NIO Inc |
| NIO Inc | Palantir Technologies Inc | Palantir Technologies Inc |
| Nokia Corp | Rolls Royce Holdings Plc | Rolls Royce Holdings Plc |
| Rolls Royce Holdings Plc | Tesco plc | Tesco plc |
| Tesla Inc | Unilever plc | Tesla Inc |
| April 2021 | May 2021 | June 2021 |
| BP Plc | AMC Entertainment Holdings Inc | AMC Entertainment Holdings Inc |
| Coinbase Global Inc | Cineworld Group plc | Avacta Group plc |
| Gamestop Corporation | Coinbase Global Inc | easyJet plc |
| GlaxoSmithKline plc | Darktrace plc | Gamestop Corporation |
| International Consolidated Airlines Group SA | Gamestop Corporation | International Consolidated Airlines Group SA |
| Legal & General Group plc | International Consolidated Airlines Group SA | Legal & General Group plc |
| Lloyds Banking Group plc | ITM Power plc | Lloyds Banking Group plc |
| Rolls Royce Holdings Plc | Rolls Royce Holdings Plc | National Grid |
| Tesco plc | Tesla Inc | Rolls Royce Holdings Plc |
| Tesla Inc | Vodafone Group plc | Vodafone Group plc |
| July 2021 | August 2021 | September 2021 |
| AMC Entertainment Holdings Inc | AMC Entertainment Holdings Inc | Apple Inc |
| Aviva plc | Aviva plc | ASOS plc |
| BP Plc | BP Plc | Aviva plc |
| Cineworld Group plc | Gamestop Corporation | CMC Markets Plc |
| easyJet plc | Hargreaves Lansdown plc | Darktrace plc |
| Gamestop Corporation | International Consolidated Airlines Group SA | easyJet plc |
| International Consolidated Airlines Group SA | Legal & General Group plc | Eurasia Mining plc |
| Legal & General Group plc | Lloyds Banking Group plc | Gamestop Corporation |
| Lloyds Banking Group plc | Phoenix Group Holdings Plc | International Consolidated Airlines Group SA |
| Rolls Royce Holdings Plc | Rio Tinto plc | Rio Tinto plc |
| October 2021 | November 2021 | December 2021 |
| ASOS plc | Aviva plc | Boohoo Group plc |
| Boohoo Group plc | BP Plc | Cineworld Group plc |
| Darktrace plc | easyJet plc | Darktrace plc |
| easyJet plc | International Consolidated Airlines Group SA | easyJet plc |
| Facebook Inc | Lloyds Banking Group plc | Gamestop Corporation |
| International Consolidated Airlines Group SA | NVIDIA Corp | International Consolidated Airlines Group SA |
| National Grid | Rio Tinto plc | ITM Power plc |
| Rio Tinto plc | Rivian Automotive Inc | Lloyds Banking Group plc |
| Unilever plc | Rolls Royce Holdings Plc | Rolls Royce Holdings Plc |
| Vodafone Group plc | Tesla Inc | Tesla Inc |
| January 1 - January 30 2022 | ||
| Boohoo Group plc | ||
| Gamestop Corporation | ||
| ITM Power plc | ||
| Lloyds Banking Group plc | ||
| Microsoft Corporation | ||
| Persimmon plc | ||
| Rolls Royce Holdings Plc | ||
| Smith & Nephew plc | ||
| Tesla Inc | ||
| Unilever plc |
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
About Hargreaves Lansdown
Over 1.67 million clients trust us with £138.0 billion (as at 30 September 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
