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The funds backing investment boom winners

If recent reports are true and interactive investor is now asking banks to pitch for a possible initial public offering (IPO) next year, it marks a step closer to one of the UK market’s more highly anticipated flotations. The platform has benefited significantly from the DIY investing boom of the pandemic: it took on 31,667 new clients in the first half of this year alone, having added 41,796 new customers in 2020. At the midpoint of 2021 the platform had more than 400,000 customers and assets under administration of nearly £55bn. It has also been notably acquisitive in its recent history.

It should be noted that no formal decision has been made on whether the IPO will go ahead, according to Sky News reports. But a successful flotation is likely to be welcome news to many investors, as well as to Unicorn Aim VCT (UAV) that listed interactive investor as its largest holding at the end of June.

As with other trends turbocharged by the pandemic, the investing boom could well lose some of its momentum over time, for a variety of possible reasons. But whether the easy wins are gone or not, investors already have plenty of routes into this trend beyond any potential interactive investor flotation. Several other beneficiaries of the trend are available not just on the stockmarket but via a selection of UK equity funds.

Take Hargreaves Lansdown (HL.). The UK’s biggest platform made up a 6.4 per cent position for LF Lindsell Train UK Equity Fund (GB00B18B9X76) at the end of July, with Baillie Gifford UK Equity Alpha (GB0005864920) and TB Evenlode Income (GB00BD0B7D55) having positions of 3.9 and 2.2 per cent, respectively.

Some closely followed Liontrust teams are fans, too: the firm’s Sustainable Investment team back a variety of platforms, and Hargreaves made up 3.5 per cent of Liontrust UK Ethical fund (GB00B8HCSD36) at the end of June. Liontrust Special Situations (GB00BG0J2688) also holds shares in the platform according to the Hargreaves website, though the exact size position is not specified. AJ Bell (AJB) doesn't tend to represent such big positions in funds, though the likes of the Liontrust Sustainable Investment team have been known to favour it.

It’s notable that when it comes to beneficiaries of the investing boom, plenty of UK funds also hold shares in some of the leading asset managers. Liontrust Asset Management (LIO) made up 6 per cent of CFP SDL UK Buffettology fund (GB00BF0LDZ31) at the end of July, so that it was the second biggest holding after Games Workshop (GAW). Funds including FTF Franklin UK Mid Cap (GB00BZ8FPJ50), Fidelity UK Opportunities (GB00BH7HNY76), Slater Growth (GB00B7T0G907) and Jupiter UK Smaller Companies (GB00BHBX8V31) have also listed Liontrust among their biggest positions, if at lower weightings than the Buffettology fund.

Impax Asset Management (IPX) also regularly crops up on UK fund factsheets, appearing as a recent top 10 holding for names such as Henderson Smaller Companies Investment Trust (HSL), ASI UK Smaller Companies (GB0004331236​​​​​​), BlackRock Throgmorton Trust (THRG) and Marlborough UK Micro-Cap Growth (GB00B8F8YX59​​​​​​​). And Polar Capital (POLR) was the biggest holding in Marlborough Multi Cap Income (GB00B42TBF45) at the end of June.

To take the theme further, wealth managers such as Brooks Macdonald (BRK) and Brewin Dolphin (BRW) can also commonly be found in portfolios like these. While all these stocks have different pros and cons, it’s likely some of your favourite fund managers are already backing them.