SelfWealth Monthly Trading Trends: August 2020

SelfWealth Monthly Trading Trends: August 2020

The local share market posted its fifth consecutive month of positive gains in August, with the benchmark ASX 200 index gaining 2.2%. While positive sentiment from offshore markets was in no shortage, and local reporting season raised few negative surprises, the absence of a catalyst for the financials sector, which accounts for approximately one-quarter of the market, stifled the ASX.

Meanwhile, information technology and consumer discretionary stocks powered higher, with the sectors surging 15.3% and 7.8% respectively. In contrast, stocks from the consumer staples, energy, telecommunication services, and utilities sectors weighed on the market.

Here is what the SelfWealth community were buying and selling through their SelfWealth trading accounts during August.

 

Which shares and ETFs were the most held?

While still among the most-held shares on our online share trading platform, bank stocks were on the outer, with their popularity plateauing. A small level of growth in the value of holdings in Commonwealth Bank (ASX: CBA) and ANZ (ASX: ANZ) was offset by a decline in NAB (ASX: NAB) holdings. Despite the share price of NAB increasing 1.5% across the month, the collective value of NAB shares held by SelfWealth members slumped by 5.7%, indicating net selling activity.

We also witnessed further growth in the value of stocks that were among the fastest-growing ones held by members back in July. This included Afterpay (ASX: APT) and Zip Co (ASX: Z1P), where the value of those holdings recorded a net increase of 36% and 46.8% respectively. Although growth was driven by a strong level of trading activity, it was still in line with the underlying share price increase of both stocks. Afterpay is now the 4th most-held stock among SelfWealth members.

Perhaps the biggest shift in sentiment last month, however, came courtesy of Fortescue Metals Group (ASX: FMG). Already a popular choice the month prior, the stock shuffled its way into 13th place among the most-held shares in the SelfWealth community.

FMG shares traded flat across August, however, the value of stock held via SelfWealth leapt by 33.7%, indicating prominent buying among new and existing SelfWealth members. With the company benefitting from a period of robust iron ore prices, a strong FY20 report, and also declaring a dividend of $1.00 per share, some investors may have been attracted to FMG as a dividend-paying alternative to the banks.

There was one new sighting in the top 20 most-held shares, with Qantas (ASX: QAN) edging into the list. It is the first time Qantas has featured in our list, which also means it is the highest-ever position for the stock across the SelfWealth community. Total Qantas share holdings gained by 25% last month, with a flurry of trading activity contributing to positive momentum in the stock.

 

Stock Company
1 CSL CSL Limited
2 CBA Commonwealth Bank
3 WBC Westpac
4 APT Afterpay
5 NAB National Australia Bank
6 SWF SelfWealth
7 AFI Australian Foundation Inv
8 MQG Macquarie Group
9 BHP BHP
10 ANZ Australia and New Zealand Banking Group
11 Z1P Zip Co
12 TLS Telstra
13 FMG Fortescue Metals Group
14 WPL Woodside Petroleum
15 WES Wesfarmers
16 ARG Argo Investments
17 NEU Neuren Pharmaceuticals
18 MLT Milton Corp
19 WOW Woolworths
20 QAN Qantas

 

With the NASDAQ continuing its stellar run, more and more investors were looking for exposure to the index in August. As such, the value of SelfWealth members’ funds held in the Nasdaq 100 ETF (ASX: NDQ) grew by 22.7%.

At the same time, there was also a significant shift in funds towards the AAA Australian High Interest Cash ETF (ASX: AAA), which may have been spurred by concern from some investors around whether global share markets entered a ‘bubble’. In total, holdings in AAA grew by almost $15 million in the month.

For the first time since November last year, the Vanguard Australian Shares High Yield ETF (ASX: VHY) featured in the top 10 ETFs. With many ASX-listed companies reporting in August, some investors may have strategically bought into the ETF in the hope that forthcoming distributions from the fund might generously reflect the latest round of dividend declarations.

 

ETF Company
1 VAS Vanguard Australian Shares Index ETF
2 VDHG Vanguard Diversified High Growth Index ETF
3 VGS Vanguard MSCI Index International Shares ETF
4 VTS Vanguard U.S. Total Market Shares Index ETF
5 A200 BetaShares Australia 200 ETF
6 IVV Ishares S&P 500 ETF
7 NDQ Betashares Nasdaq 100 ETF
8 AAA AAA Australian High Interest Cash ETF
9 VEU Vanguard All-World ex-U.S. Shares Index ETF
10 VHY Vanguard Australian Shares High Yield ETF

 

Which shares and ETFs were the most traded?

For the second month in a row, Zip Co was the most-traded share by SelfWealth members. It topped the list in terms of the number of trades made, approximately 5,550, as well as trades by order value, well in front of any other stock on the list.

There was a significant spike in trading of Westpac (ASX: WBC) shares, with the value of trades involving the stock soaring by almost 50% month-on-month. A large flurry of activity was centred on the bank’s decision not to pay a dividend for the first half of FY20, with many bailing on the stock, while some investors with a long-term view stepped up and bought in.

Similarly, with NAB cutting its dividend by 64% to just $0.30 per share, the stock was also highly traded across the SelfWealth platform, albeit as mentioned earlier, the balance of trades were skewed towards sell orders.

 

Top 20 stocks traded by value
Code Security
1 Z1P Zip Co
2 WBC Westpac
3 NAB National Australia Bank
4 APT Afterpay
5 ANZ ANZ
6 FMG Fortescue Metals Group
7 CSL CSL
8 BBOZ Betashares Australian Equities Strong Bear Hedge Fund
9 SZL Sezzle
10 MSB Mesoblast
11 A200 BetaShares Australia 200 ETF
12 CBA Commonwealth Bank
13 MQG Macquarie Group
14 AAA AAA Australian High Interest Cash ETF
15 FLT Flight Centre
16 QAN Qantas
17 VAS Vanguard Australian Shares Index ETF
18 TLS Telstra
19 GEAR Betashares Geared Australian Equity Fund
20 AGL AGL Energy

 

With global markets rising in August, interest in geared ETFs also declined by a notable margin. The value of trades in the Australian Equities Strong Bear Fund (ASX: BBOZ) fell by 31.6%, leaving it at its lowest position in the list for several months. Meanwhile, the BetaShares U.S. Equities Strong Bear Hedge Fund (ASX: BBUS) dropped out of the top 20 most-traded shares and ETFs, albeit the Betashares Geared Australian Equity Fund (ASX: GEAR) effectively took its place.

Mesoblast (ASX: MSB) was the 10th most-traded stock by value last month, driven by the high-profile decision from the US FDA Advisory Committee regarding its remestemcel-L (RYONCIL) investigational therapy. By order size, MSB was the second most-traded stock within the SelfWealth community.

On the back of its FY20 earnings report, Telstra (ASX: TLS) shares were subject to heavy selling pressure, with the stock not typically featuring among the most-traded companies on the SelfWealth platform.

Some of the other frequently-traded names last month included Brainchip Holdings (ASX: BRN), the seventh most-traded stock by order numbers, and Kogan (ASX: KGN), the 16th most-traded stock. Both companies posted massive gains in August, rising 88.2% and 24.9% respectively.

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

 

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SelfWealth Ltd ACN 52 154 324 428 (“SelfWealth”) (Australian Financial Services Licence Number 421789). The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice.

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