We all know the buy-the-dip drill by now. When the FTSE 100 or S&P 500 sells off sharply, that’s the time to go shopping for stocks.
But did UK investors actually follow this mantra when the market tanked in early April? Or did they sell up and sit on the sidelines instead?
According to AJ Bell, UK investors did in fact pile into stocks on its platform. The data shows that customers buying investments outnumbered sellers by two to one between 3 and 10 April.
I find this encouraging, as all the research does indeed say that the best time to snap up bargains is during periods of extreme fear and uncertainty. And we got plenty of that after President Trump’s ‘Liberation Day’ announcement — for nearly a week, the only thing liberated in my portfolio was a lot of value!
So, what were AJ Bell’s DIY investors buying during the carnage? Here’s the top 10 net buys in the first week after Trump’s bombshell.
| 1 | Vanguard S&P 500 ETF (LSE: VUSA) |
| 2 | Fidelity Index World |
| 3 | Barclays |
| 4 | HSBC FTSE All World |
| 5 | Legal & General |
| 6 | Nvidia |
| 7 | BP |
| 8 | SPDR S&P 500 ETF |
| 9 | iShares S&P 500 ETF |
| 10 | Rolls-Royce |
My thoughts
Legal & General and BP don’t surprise me, as their dividend yields spiked to 9% and 7% respectively during the sell-off.
On the growth side, AI juggernaut Nvidia from the S&P 500 is hardly a shocker. For the record, I also added Nvidia to my ISA when the share price dropped beneath $100.
I can’t say I’m surprised to see Rolls-Royce also made the cut (just). The engine maker has been on the most-bought shares list almost constantly for two years now. However, this wasn’t one I was personally adding to in early April.
The most bought UK stock was Barclays, which is a little bit of a head-scratcher for me. Banks would likely see rising bad debts during a global recession, while the 3%-ish yield would hardly provide much solace.
Then again, I’ve never owned Barclays shares, and therefore missed out on the 100%+ rally that began in late 2023. And since bottoming out on 9 April, they’ve rebounded nearly 23%. So, as things stand, these savvy investors were right to pile into the FTSE 100 bank.
Buying the haystack
As we can see though, the S&P 500 stocks that investors were piling into was…all of them!
That’s because the overwhelming majority of buyers were investing in an S&P 500 tracker fund or global index (also dominated by US stocks). The most popular was the Vanguard S&P 500 UCITS ETF.
Therefore, these investors were doing exactly what John Bogle, the founder of Vanguard, once advised: “Don’t look for the needle in the haystack. Just buy the haystack.”
The S&P 500 is dominated by tech giants like Apple, Microsoft, Amazon, and Meta. However, each one has its own risks. For Apple, it’s going to be very costly to move its manufacturing base out of China. Meanwhile, Meta’s digital advertising empire would likely suffer during an economic downturn.
So the index isn’t out of the trade-war woods yet, and could easily pull back sharply again in the months ahead.
Nevertheless, given their dominance, I’m not surprised that investors are backing these tech giants to recover. Indeed, the S&P 500 index has already climbed 10.7% since 8 April — proving their bullishness correct, at least so far.
