Investors shifted away from technology-focused funds in August as they sought stability amid market volatility, according to Fidelity International.

The firm described August as a rollercoaster month for investors as global stock markets experienced significant volatility, with many market indices experiencing sharp falls early in the month before regaining much of the ground they had lost.

Funds

AI stocks have had a bumpy ride over the past two months, and Fidelity ISA and SIPP investors broadened their horizons beyond the sector, with a “notable turnaround” in the best-selling funds on Fidelity Personal Investor in August.

Although tech-focused funds were at the forefront for investors for much of 2024, with the Legal & General Global Technology Index Trust consistently in the top 10, August saw investor enthusiasm towards tech stocks cool and moving to more diversified and defensive assets.

“The tech sector has had a stellar run, but the past month has been rocky,” said Fidelity International investment director, Tom Stvenson.

“Nvidia has become the single biggest influence on the stock market this year, with a high correlation between movements in its share price and that of the wider market and the value of the company - briefly the world’s biggest - fell by about $750bn in July and August before regaining all of that lost market capitalisation in a handful of trading days.

“We’re seeing a classic shift towards safety, as investors seeking stability looked to preserve capital amid market volatility.”

Stevenson noted that, in this shift, money market funds had become more appealing, offering liquidity and security.

Funds such as the Royal London Short Term Money Market Fund and Fidelity Cash Fund continued to be popular among Fidelity’s ISA and SIPP investors.

“In addition to the pullback from tech, August saw a rise in interest for funds focused on global diversification and emerging markets,” Stevenson continued.

“A new entrant to the top ten for ISA investors is the HSBC FTSE All Share World Index Fund, indicating that investors are seeking broader exposure amidst global economic uncertainties.

“Notably, emerging market funds like the Fidelity China Focus Fund and Jupiter India Fund also attracted significant interest, highlighting a strategic pivot towards regions with growth potential.”

Looking at the best-selling shares, Fidelity investors broadened their focus to increase a more diverse range of sectors, such as consumer goods, technology and industrials.

Stocks

Although there was a move away from tech funds in August, ISA investors’ notable stock selections included AlphaWave IP Group, which entered the top 10 best-selling stocks for ISA investors for the first time.

“With the ongoing demand for semiconductor technology, particularly in AI and data centres, AlphaWave emerged as a top choice,” Stevenson explained.

“Riding the wave of a cruise tourism boom is Carnival which appeared in the top ten best-selling list for ISA investors in August.

“The stock has made significant gains in the past few months, buoyed by strong booking momentum for 2025.

“Second-hand car retailer, Motorpoint Group, appeared in the top-selling list for the first time and despite a decrease in revenues and widened pre-tax losses, ISA investors see it as a compelling pick, reflecting the strong performance of the used car market.

“For SIPP investors, residential housebuilder Crest Nicholson appeared as a new entrant following its rejection of a takeover bid from its competitor, Bellway.”

Investment trusts

Investors also continued to see investment trusts focused on technology as attractive, Stevenson highlighted, with the Polar Capital Technology Trust attracting further “significant” inflows.

“Allianz Technology Trust also maintained a strong presence in the rankings for SIPP investors,” he continued.

“Beyond technology, global growth remained a key theme for Fidelity investors in August. The JP Morgan Global Growth & Income Trust saw substantial interest, particularly among ISA investors, as it offers a diversified approach to investing in high-quality companies worldwide.

“SIPP investors also showed a growing appetite for trusts with a focus on diversification and defensive strategies. The F&C Investment Trust, one of the oldest investment trusts, continued to draw inflows.”

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