SelfWealth Monthly Trading Trends: October 2020

SelfWealth Monthly Trading Trends: October 2020

While the ASX briefly hit a seven-month high in mid-October, a bout of selling late in the month kept the local market’s gains in check, with the ASX 200 adding 1.9%.

One of the main catalysts for the rise last month, and in turn the outperformance compared with the US market, was the government’s Federal Budget, which in many quarters was deemed ‘busy friendly’.

In addition, dovish rhetoric from the Reserve Bank of Australia all but confirmed it would cut rates in November, providing further impetus for the market. Nonetheless, the mood was dampened somewhat by the negotiations deadlock in the US regarding a new stimulus deal.

Once again, the information technology sector was instrumental to the rising market, albeit it was helped this time by the financials sector, where the banks were able to rebound strongly. Performance contrasted for stocks from the industrials, materials, utilities and telecoms services sectors, which weighed on the market.

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

 

Which shares and ETFs were the most held?

The leading shares held by SelfWealth members last month were notably similar as those of September, with some minor variances.

Money continued to pour into perennial favourite CSL (ASX: CSL), which sits convincingly atop the charts. While the stock was largely flat across October, edging out a narrow gain of 0.2% for the month, the value of holdings in CSL shares rose by 12.9% across the SelfWealth community. This includes new sign-ups, however, a large driver of the growth was investors topping up their holdings.

After a month of being on the outer amid the threat of new competition from PayPal in the buy-now pay-later segment, Afterpay (ASX: APT) and Zip Co (ASX: Z1P) both gained popularity once again. The duo ranked as the 6th and 12th most-held shares.

Interestingly enough, between the pair, only Afterpay’s share price rose last month, with the stock gaining 20.9% on the back of a strong third-quarter trading update showing significant growth in underlying merchant sales. This share price appreciation was the driver of the increase in the value of members’ holdings in the stock. In contrast, Zip shares dipped by 7.3%, although it appears investors were prepared to buy the dip, as the value of members’ holdings in Zip shares actually jumped by 29% month-on-month.

For the first time, Flight Centre (ASX: FLT) made an appearance in the top 20 most-held shares across our online share trading platform, coming in at number 17. That move came despite the company’s share price plummeting by 18.2% last month. It is likely that investors were buying the dip in anticipation of news surrounding the reopening of state borders in Australia, Melbourne’s suppression of the Coronavirus, as well as the launch of the New Zealand travel bubble.

In turn, shares in Woolworths (ASX: WOW) slipped out of the list for the first time since we began analysing SelfWealth trading trends a year ago. The stock has previously been a stalwart in the portfolios of many SelfWealth members, although in recent times it has gradually eased down the list as we witness a greater preference for growth stocks and contrarian plays.

 

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

 

The list of the most-held ETFs was identical versus September, with mid-to-high single-digit growth in holdings witnessed across nearly all of the leading ETFs. The only ETF to witness an outflow of funds was the AAA Australian High Interest Cash ETF (ASX: AAA), which reversed its trend from the month prior.

One ETF that is emerging very quickly is the BetaShares Asia Technology Tigers ETF (ASX: ASIA), which now sits just outside the top 10. Coming in at number 11 on the list, SelfWealth members’ holdings in the ETF are only 5% off those who hold the SPDR S&P/ASX 200 Fund (ASX: STW). At the current rate of growth, it would not surprise us if the ‘ASIA’ fund features higher on our list in the near-future.

The ‘ASIA’ ETF provides investors with exposure to the 50 largest Asian technology companies, ex-Japan. Given the Asia region has fared better than many other parts of the world in combatting COVID, as well as investors’ appetite for tech stocks in recent times, the fund recorded a gain of 42.2% in the six months up til the end of October.

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 AAA AAA Australian High Interest Cash ETF
7 IVV Ishares S&P 500 ETF
8 NDQ Betashares Nasdaq 100 ETF
9 VEU Vanguard All-World ex-U.S. Shares Index ETF
10 STW SPDR S&P/ASX 200 Fund

 

Which shares and ETFs were the most traded?

For the first time since June, the Betashares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) was the most-traded stock among SelfWealth members. Trading of the inverse-leveraged ETF was 58.9% higher than September, with traders buying into the ‘short’ fund despite the ASX hitting a seven-month high at the time.

Elsewhere, trading data showed that Flight Centre (ASX: FLT) wasn’t just a favourite among long-term holders, but also traders. The travel agent featured as the third most-held share across the SelfWealth community in October, its highest-ever position. There were more than 1,500 orders involving FLT shares, with speculation around domestic travel proving a catalyst for the action.

Mesoblast (ASX: MSB) was also on the radar of the SelfWealth community, with the stock notching up a record position as the fifth most-traded stock by value. A large part of the trading activity was driven by the company’s setback with the FDA, which sent its shares tumbling lower. However, there was strong buying support for the stock centred on a ‘rebound’ thesis, with countless trades after the fall. Mesoblast was the third most-traded stock by total order numbers.

There was a new micro stock in favour last month as Douugh (ASX: DOU) listed on the ASX following a reverse takeover of ZipTel. After completing a $6 million raise, the fintech app, which has drawn comparisons to a neobank, stormed higher and at one stage had soared more than 700% from its listing price. Shares in Douugh were at the centre of nearly 4,000 trades across the SelfWealth share trading platform last month, second only to Zip Co. The stock also set a SelfWealth record as the smallest company we’ve seen achieve such lofty heights in terms of the value of shares exchanged.

Rounding things out, further down the list among some of the regular names was another new entrant, IOUpay (ASX: IOU). Following its rebrand in September, the fintech business focuses on digital payments solutions and offers mobile banking products to corporates in the Southeast Asia region. Amid a frenzy for established payments providers across the ASX, traders were keen to gain exposure to the newest entrant in the payments sector, with over 1,700 trades involving the stock.

 

Top 20 stocks traded by value
Code Security
1 BBOZ Betashares Australian Equities Strong Bear Hedge Fund
2 Z1P Zip Co
3 FLT Flight Centre
4 APT Afterpay
5 MSB Mesoblast
6 CSL CSL
7 DOU Douugh
8 TLS Telstra
9 WBC Westpac
10 ANZ ANZ
11 NAB NAB
12 GEAR Betashares Geared Australian Equity Fund
13 FMG Fortescue Metals Group
14 VAS Vanguard Australian Shares Index ETF
15 IOU IOUpay
16 MQG Macquarie Group
17 A2M A2 Milk
18 VDHG Vanguard Diversified High Growth Index ETF
19 CBA Commonwealth Bank
20 BBUS BBUS U.S Equities Strong Bear Fund

 

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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