Capping off what might be considered the final chapter to a remarkable recovery in equity markets throughout 2020, the Australian and US share markets both increased in December.

The ASX 200 gained 1.1% last month, with materials stocks having a major impact due to the strength of iron ore miners, rare earth and lithium plays. Up until the final trading session of the year the local benchmark index looked set to finish 2020 with a flat return, but in the end, the index delivered a calendar year return of approximately -1.4%. Meanwhile, the S&P 500 advanced 3.7% in December, extending its return for the year to 16.3%.

Which ASX shares and ETFs were the most held?

Blue-chip heavyweights CSL (ASX: CSL), Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC) finished December as the three most-held stocks across the Selfwealth community, and not for the first time either. In fact, the trio found itself atop the rankings for 11 out of 12 months in 2020, highlighting that these stocks remain undisputed buy-and-hold favourites among Selfwealth members.With the share price of Afterpay (ASX: APT) reaching a series of new all-time highs, the stock moved its way into fifth position on the list. The trend came as the stock was admitted to the ASX 20 index, placing it among the largest companies across the local share market.Investment managers also moved up the list, however, that was largely because investors traded out of other positions that they may have been reluctant to hold over the low liquidity period. Australian Foundation Investment (ASX: AFI), higher into sixth on our list, as well as Argo Investments (ASX: ARG), which returned after its first absence, were the most prominent movers.Fortescue Metals Group (ASX: FMG) climbed to its equal-highest position of 13th in the rankings, fuelled by a 28.5% increase in its share price throughout December. With iron ore prices soaring to as high as US$176/tonne amid strong steel output from China, and further supply disruption from export rival Brazil, there was a strong tailwind in play that helped the stock achieve a record high.Finally, interest in the travel sector remained elevated compared with months ago, despite the latest outbreak of COVID cases across New South Wales and Victoria. Qantas (ASX: QAN) ended December two spots higher on our list in 17th position, while Flight Centre (ASX: FLT) gained five places to finish in 15th. For the second month in a row, each result was a record placement in the Selfwealth community.StockCompany1CSLCSL Limited2CBACommonwealth Bank3WBCWestpac4NABNational Australia Bank5APTAfterpay6AFIAustralian Foundation Inv7MQGMacquarie Group8ANZAustralia and New Zealand Banking Group9SWFSelfwealth10BHPBHP11TLSTelstra12Z1PZip Co13FMGFortescue Metals Group14WPLWoodside Petroleum15FLTFlight Centre16WESWesfarmers17QANQantas18ARGArgo Investments19WOWWoolworths20MLTMilton CorpWith the exception of one change to the order of the list, the names of the top ETFs held by Selfwealth members were otherwise unchanged. The AAA Australian High Interest Cash ETF (ASX: AAA) saw a marked outflow for the third month in a row, switching places with the Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU), despite the underlying performance of the latter remaining flat throughout December.ETFCompany1VASVanguard Australian Shares Index ETF2VDHGVanguard Diversified High Growth Index ETF3VGSVanguard MSCI Index International Shares ETF4VTSVanguard U.S. Total Market Shares Index ETF5A200BetaShares Australia 200 ETF6IVVIshares S&P 500 ETF7NDQBetashares Nasdaq 100 ETF8VEUVanguard All-World ex-U.S. Shares Index ETF9AAAAAA Australian High Interest Cash ETF10ASIABetaShares Asia Technology Tigers ETF

Which ASX shares and ETFs were the most traded?

Amid lighter volumes that are typical in the stock market over the Christmas holiday season, traders took the opportunity to reposition their portfolios for exposure to the broader ASX. As a result, the Vanguard Australian Shares Index ETF (ASX: VAS) returned to the top of the list of the most-traded stocks for the first time since February, having been outmuscled in the meantime by short' exposure courtesy of the Betashares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ).As touched on earlier, Fortescue Metals Group was a favourite among investors using the Selfwealth online share trading platform, and the frenzied buying activity also ensured that it was the second most-traded stock by value in December.Trading activity in the likes of Flight Centre (ASX: FLT), Zip Co (ASX: Z1P) and Afterpay was significant, as we've become used to seeing in recent months, with each of the trio attracting its fair share of supporters and cynics.One stock that defied the odds to make an appearance, however, was Creso Pharma (ASX: CPH). The small cap medicinal cannabis company was at one stage around 900% up in December, before the share price eased somewhat. Nonetheless, shares in CPH gained roughly 260% across the month, with trading in the stock totalling more than $26 million. Combined with its peer Cann Group (ASX: CAN), there were well in excess of 2,000 trades involving these stocks, driven largely by favourable declarations towards cannabis from the UN and US House of Representatives.Elsewhere, trading activity in A2 Milk (ASX: A2M) was approximately 50% higher by value compared with the month prior. The increase was sparked by a revenue and earnings downgrade from the company in light of the restrained daigou segment and ongoing international border closures.Top 20 stocks traded by valueCode Security1VASVanguard Australian Shares Index ETF2FMGFortescue Metals Group3FLTFlight Centre4APTAfterpay5Z1PZip Co6CSLCSL7BBOZBetashares Australian Equities Strong Bear Hedge Fund8WBCWestpac9CPHCreso Pharma10GEARBetashares Geared Australian Equity Fund11A2MA2 Milk12MSBMesoblast13CGFChallenger14WEBWebjet15VDHGVanguard Diversified High Growth Index ETF16TLSTelstra17MQGMacquarie Group18BHPBHP19ANZANZ20CBACommonwealth Bank

2020 most-traded ASX stocks

Looking back over the year gone by, it was clear that the buy-now pay-later stocks were favourites across the Selfwealth community, with Zip and Afterpay accounting for nearly 65,000 trades worth a total of almost $1 billion. That's roughly one trade per member across the entire community!

Optimism surrounding the management of COVID also led many investors to seek out exposure to the travel sector, namely through Flight Centre, Qantas and Webjet. Between the trio, there were more than 40,000 trades involving these stocks across the Selfwealth platform in 2020.

It's also worth pointing out that there was significant trading in ETFs over the course of the year, which we have not included in our rankings below. However, by value, the BetaShares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) was the most-traded instrument of any kind, while by trade numbers, the stalwart Vanguard Australian Shares Index ETF (ASX: VAS) was the second-most traded stock.[caption id="attachment_3947" align="aligncenter" width="750"]

Above rankings based on number of trades, not by trade values. ETFs have been excluded[/caption]

December US share trading activity

With Selfwealth's US share trading platform launching last month, early data highlights a keen interest in offshore tech stocks among Selfwealth members.Exchange traded funds from ARK Investments grew in popularity among global investors throughout 2020, with five of its actively-managed ETFs returning an average of more than 150% last year. Their popularity has largely been aligned with the various high-performing tech stocks held by each fund, including various companies touted as disruptors'.With that, various other names among our list of the most-traded US stocks fit in with the disruption theme. This includes household name Tesla (NASDAQ: TSLA), big data analytics firm Palantir Technologies (NYSE: PLTR), Chinese electric vehicle manufacturer Nio (NYSE: NIO) and plant-based meat substitute company Beyond Meat (NASDAQ: BYND).Top 10 stocks traded by valueCode Security1ARKKARK Innovation ETF2TSLATesla3ARKGARK Genomic Revolution ETF4PLTRPalantir Technologies5AAPLApple6QQQInvesco QQQ Trust Series 17MSFTMicrosoft8SQSquare9NIONio Inc10BYNDBeyond Meat

That's all for this Trade Trends report, stay tuned for the next edition this time next month!