SelfWealth Monthly Trading Trends: February 2020

SelfWealth Monthly Trading Trends: February 2020

As the market began to show signs of jitters in the wake of the Coronavirus outbreak, stocks retreated heavily in the final days of February. The ASX 200 index fell 8.2% across the month, but it was a heightened level of trading activity that was of most interest.

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

 

Which shares and ETFs were the most traded?

As we first signalled in our January summary, the balance of the SelfWealth community began to shift towards a more neutral stance on equities, with this trend continuing in February as well. The surplus in total buying volume to selling volume was slightly down compared with the month prior, coming in at 1.16x versus 1.19x. For the top 10 stocks and ETFs, the ratio of this volume stood at 1.24x, slightly up from January’s reading of 1.14x.

Purchases
Code Security
1 VAS V300AEQ/ETF
2 BBOZ BETA SBEAR/FD
3 CBA Commonwealth Bank
4 AAA BETACASH/ETF
5 ANZ ANZ
6 VDHG VDHIGHGROW/ETF
7 CSL CSL
8 VGS VINTL/ETF
9 FMG Fortescue Metals Group
10 STW SPDR S&P/ASX 200 Fund

 

Sales
Code Security
1 ANZ ANZ
2 CBA Commonwealth Bank
3 BBOZ BETA SBEAR/FD
4 STW SPDR S&P/ASX 200 Fund
5 CSL CSL
6 VAS V300AEQ/ETF
7 WBC Westpac
8 APT Afterpay
9 FMG Fortescue Metals Group
10 NAB NAB

 

Although markets tapered away in the latter part of February, the Vanguard Australian Shares Index ETF (ASX: VAS) was the most-bought stock last month, with its value nearly double that of the next-highest result. In fact, with more than 1500 buy orders placed through the SelfWealth platform across the month, the total value of VAS shares bought during February was up more than 100% from the value bought during January.

This indicates that a portion of the SelfWealth community may have been banking on January’s strong momentum to continue, or hastily jumped into the market as stocks started to tumble. With that said, however, sell order numbers for VAS represented around 15% of the ETF’s buy orders, but their value was around one third of the buy volume. We can deduce from this that the average order size for sales in VAS executed by SelfWealth were much larger than the corresponding buy orders.

Perhaps surprisingly, the value of buying activity in the Australian Equities Strong Bear Fund (ASX: BBOZ), while still strong, was actually lower than that during January, despite orders jumping from around 150 trades to 229 trades. With these smaller transactions diminishing the overall value of BBOZ stock bought, it gives us an impression that many investors may have cautiously entered their ‘short’ bet with no particular expectations the market fall would turn into a full-blown bear market.

While familiar names like CSL (ASX: CSL), Vanguard Diversified High Growth Index ETF (ASX: VDHG) and Vanguard MSCI Index International Shares ETF (ASX: VGS) featured among the most-bought stocks, there were some further signs of the market’s bullishness wavering. The most telling evidence of this came from the emergence of a fairly even split in buying and selling volume for stocks like Commonwealth Bank (ASX: CBA) and SPDR S&P/ASX 200 FUND (ASX: STW).

Meanwhile, for stocks like ANZ (ASX: ANZ), the deficit in buying volume to selling volume became more pronounced. In fact, the total value of ANZ shares sold via SelfWealth during February was more than double that of January, even though the stock had only fallen 3.6% at that point in time. It turns out this was a good move for sellers, however, given the steep decline since then.

Elsewhere, in terms of significant activity as measured by the number of trades, SelfWealth members flocked to trade shares in Zoono (ASX: ZNO), Avita Medical (ASX: AVH), Afterpay (ASX: APT), Appen (ASX: APX), Nearmap (ASX: NEA), Altium (ASX: ALU) and the Betashares Nasdaq 100 ETF (ASX:NDQ). With the exception of Afterpay, the nature of trading activity in each of these stocks was skewed towards buying.

Finally, it’s worth noting the transfer of capital towards the AAA Australian High Interest Cash ETF (ASX: AAA). Although there were only 38 buy trades, this activity resulted in a significant amount of funds pouring into the ETF, something we haven’t seen for some time. Given the stability and defensiveness that this cash-backed ETF holds, it was yet another sign that some investors were opting for a safety-first approach in light of potential market volatility.

 

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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