Private investors were better prepared for the market turmoil than their professional counterparts, Capita Registrars says.
In the eight months to end July, private investors sold £8bn of cyclical shares, such as financial, industrial and energy stocks; while purchasing £2.1bn of defensive stocks, including utilities and consumer goods.
Capita says these stocks, such as tobacco and beverages, are less exposed to troubling market disturbances.
The £5.9bn net equity holdings sale reduced private investor UK Plc share to 11.96%, from 12.15%.
Capita Registrars director John Roundhill says private investor strategy has proved correct.
“For several months our research has shown a steady sell trend by private investors and how they have been refocusing their portfolios on defensive stocks,” he says.
“We pin-pointed in June that their nervousness suggested a correction was imminent.
“When the turmoil began to hit in the middle of July, private investors were ready for it.”
Capita Registrars says contrary to popular belief, the notion private investors sell at the bottom and buy at the top is not accurate.
It says the £1.4bn sales and purchases figure for June and July was the third lowest in the last 18 months, despite record overall trading volumes on the London exchange.
“When markets are most uncertain, private investors sit tight," Roundhill says.
"Medium to long-term investors prefer not to trade in volatile markets."
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