Following an exhausting 2,000-point rally between February 2016 and the record high in June this year, equity markets have extended their pause for breath, moving largely sideways over the summer months.
Both the FTSE 100 (UKX) and broader FTSE All-Share index (ASX) rose less than 1% in August, though North Korean sabre-rattling tested investors’ nerves.
Concerns that Kim Jong-un could nuke Guam, the US west coast or anywhere in between began a rollercoaster ride through the month, as enthusiastic buyers took advantage of each sell-off.
Mopping up underperformers like Barclays (BARC) proved a popular trade. After falling 6% in August, Barclays shares haven’t been this cheap since November 2016.
Trading at a discount to most domestic peers on several key multiples, Barclays gate-crashed the top five most-traded large-caps on the Interactive Investor platform as buyers outnumbered sellers by more than two-to-one.
AstraZeneca’s (AZN) popularity proved fleeting as bargain hunting following July’s crash dried up. Investors who bought heavily last month below £43 are busy counting profits, currently a healthy 8%.
Perhaps the biggest story to pass under the radar in August was the AIM market’s break above 1,000 for the first time since summer 2008. It’s easily outperformed the other domestic indices in 2017 so far, rising 20% in the past eight months.
There were big moves in August by some of the junior market’s biggest companies, among them Frontier Developments (FDEV) (67%), Plus500 (PLUS) (45%), Blue Prism (PRSM) (33%) and IQE (IQE) (29%).
It was IQE that piqued interest among investors in August, almost toppling UK Oil & Gas (UKOG) from top spot as trading volume on the Interactive Investor platform more than doubled.
A rally, given fresh momentum by a bullish update in July, spilled over into August, pushing IQE shares to new highs.
There’s real excitement here as market watchers speculate about the possibility its chip components feature in Apple’s new iPhone8, due to be launched next week (12 September).
Internet of Things (IoT) hopeful Telit Communications (TCM) came from nowhere in August following a profits warnings and shock departure of its CEO. A subsequent plunge in the share price and extreme volatility made it a traders’ favourite.
Overseas, trading volume for Apple (AAPL) doubled as the shares surged by 10% in August. Apple shares typically nudge higher ahead of major product launches and the unveiling of the iPhone8 next week has pushed the share price to a record high.
No change. Fundsmith Equity still top. Woodford Equity Income second.
Vanguard S&P 500 (VUSA) still top Vanguard Emerging Markets (VFEM) enters the top five in at number four. Vanguard FTSE World High Div Yield (VHYL) drops out from fifth in July.
Woodford (WPCT) and Witan (WTAN) swap places, with Woodford now second behind Scottish Mortgage (SMT).
TR European Growth (TRG) replaces RIT Capital (RCP) at five.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.