Year in Review
When you invest your capital is at risk, the value of your investments can go down as well as up and you may get back less than what you invest.
As the sun sets on 2022 we take a look back at what you invested in
It was a big year for American stocks, especially the tech titans. But a fall from grace at the end of Q1 meant plenty of those firms saw their share prices crumble. Judging these businesses on their long-term value rather than the near-term interest rate environment could be one reason why Freetrade users are holding onto those companies now.
Price corrections are par for the course in markets, and while some stocks may have got cheaper throughout the year, that doesn’t mean investors are giving up on them. Freetrade users are also holding a lot of US and UK ETFs, with the UK slowly rising in popularity throughout the year.
Top 10 Holdings
Freetrade data, 2022
S&P 500 ETFs 25.2%
Tesla $TSLA 24%
All World ETFs 11.3%
Apple - $AAPL 8.7%
UK 100 ETFs 6.2%
Alphabet $GOOGL 5.8%
NASDAQ 100 ETFs 5.4%
Amazon $AMZN 5.3%
Microsoft $MSFT 4.9%
GameStop $GME 3.2%
UK stocks were back on the radar
This year’s biggest mover was a UK wind farm investor. Green energy is still a big favourite with investors but, with clean energy ETFs sliding down the buy list, Freetrade users are being more selective in the companies they’re backing.
With ESG ETFs under fire this year for poor labelling and weak governance, Freetrade users are willing to do the leg work to find investments that they trust are bringing value and adhering to their mission statements too.
Freetrade users got excited about plenty of other UK industries, including grocers, miners and banks. This snapshot reveals a well-diversified picture, and several firms with a history of profitability have proven increasingly appealing to investors seeking more stable returns.
This shows that investors are generally leaning towards firms with longer and more established histories instead of the newer market entrants. However, past performance is not a reliable indicator of future returns.
Biggest Risers (rankings)
Freetrade data, 2022
Same EV company, different month
Well there’s no ignoring the ever-present name at the top of the team sheet. But, beyond Tesla, there’s a more nuanced story behind 2022’s top buys.
US tech is still in vogue but Meta’s path through the buy list shows investors were pouncing on valuation weakness rather than buying into the growth of the past few years. For the rest of the tech gang it’s likely a story of concentrating on the sector’s inherent long-term value and averaging into lower valuations for now.
VUAG slipping down the list reflects a greater attention on selectivity as inflation has become more prominent.
In the same vein, the appearance of XSPS shows investors were anticipating rates hurting the market and chose to hedge their individual stocks by taking a view that the whole index would suffer.
When everything gets hit indiscriminately, it’s a good chance to see which victims are being unfairly punished, that’s been the tale of the second half of the year.
With 2022’s burst of chunky rate rises likely to give way to a less intense trajectory now, 2023 might rekindle the love of US growth stocks, especially if valuations coming down this year start to look too good to pass up. Inflation easing and rates levelling off will probably fire the starting pistol.