Trading Trends, June 2020: Investors Chase Afterpay, Zip, the Big Four

Trading Trends, June 2020: Investors Chase Afterpay, Zip, the Big Four

After a strong start to June, where shares raced to their highest level since early March, the market faced some resistance as concerns around the Coronavirus pandemic, particularly in the US, filtered through to local investors. Nonetheless, by the end of the month, the ASX had re-found some momentum, adding 2.5% across the course of June.

Leading the way were three key sectors. The IT sector was a stand-out, following in the footsteps of the NASDAQ, surging 6% throughout June. But it was also supported by the consumer discretionary and consumer staples segments, which advanced 5.4% and 5.1% respectively as investors made their bets on a reopening global economy.

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

 

Which shares and ETFs were the most held?

While there were a few changes to the list of the top 20 most-held shares in SelfWealth members’ trading accounts, including some stocks that saw their collective valuation decrease, the broader trend pointed towards sizeable portfolio growth. The top 20 most-held shares increased by an average of 12.6% in value, outpacing the 2.5% growth in the ASX 200 across the same period.

The big banks once again were a prominent fixture in SelfWealth members’ portfolios, with the strength of the financials sector throughout June driving portfolio growth. Shares in Commonwealth Bank (ASX: CBA) gained 8.9% last month, which translated into similar growth in the value of CBA shares held via the SelfWealth trading platform.

Share price gains in the likes of Westpac (ASX: WBC), ANZ (ASX: ANZ) and NAB (ASX: NAB) were more muted, in the low single-digit range, however, each stock recorded a double-digit growth in value across SelfWealth portfolios.

SelfWealth (ASX: SWF) leaped into fifth position on the list of the most-held shares. With a near 50% movement in the share price of SWF across June, members’ holdings naturally reflected this rise. However, the stock was also on the verge of joining the top 20 most-bought shares in terms of order numbers, with more than 650 buy orders bettering what were approximately 400 sell orders.

Elsewhere, the value of Afterpay (ASX: APT) shares held in SelfWealth trading accounts rose by 45.3% compared with the month prior. We also observed that more members have been holding onto their shares in the runaway stock. APT shares are now the 10th most-held stock on our list, the highest position it has ever featured. With a marked shift taking place in the movement from cash transactions to digital payments, many investors are seemingly backing Afterpay’s international growth trajectory.

It is this same thematic that also saw Zip Co (ASX: Z1P) enter the top 20 most-held stocks for the first time, finding its way into 16th position and surpassing established blue-chip stocks like Cochlear (ASX: COH), down two places to 22nd on the list, and Woolworths (ASX: WOW), down one place to 18th.

Meanwhile, collective holdings in Neuren Pharmaceuticals (ASX: NEU) and Rio Tinto (ASX: RIO) slid sharply, down 14.9% and 6.2% respectively, with the latter actually contrasting its share price rise of 4.9%. This movement away from Rio Tinto, however, could be explained by a rotation of capital into the miner’s peer, Fortescue Metals Group (ASX: FMG), which leapfrogged it into 19th position on account of a 14% increase in the value of member holdings last month.

 

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

 

The top 10 ETFs held by SelfWealth members remained unchanged in June, however, there were still some prevailing trends. First, there was a shift away from US markets, potentially in response to the escalating pandemic situation abroad. The value of Vanguard U.S. Total Market Shares Index ETF (ASX: VTS), Ishares S&P 500 ETF (ASX: IVV) and Betashares Nasdaq 100 ETF (ASX: NDQ) each fell by a slightly higher than proportional amount compared with the underlying performance of each ETF.

On the other hand, SelfWealth members’ holdings in the likes of Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) were 12.6% and 13.1% higher than May, even though the underlying performance of the ETFs were 2.6% and 2.5% respectively. The value of funds held in the Australian High Interest Cash ETF (ASX: AAA) fell by another 11.5% month-on-month, further suggesting some repositioning towards Australian equities.

 

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

 

Which shares and ETFs were the most traded?

There were various changes among the most-traded stocks from last month, however, with market volatility prevailing, the Australian Equities Strong Bear Fund (ASX: BBOZ) remained atop the buy and sell order lists in terms of the value of shares traded, albeit fractionally down on May numbers.

However, the addition of Zip Co (ASX: Z1P) and Flight Centre (ASX: FLT) offered a couple debutants for the list of the most-traded shares. Zip Co stormed to popularity in the wake of news that it would acquire Quad Pay and further its expansion plans in the US. In total, there were 6,390 trades involving Zip shares, with buy orders approximately two-thirds of those. Meanwhile, Flight Centre rose to prominence as SelfWealth members looked for exposure to the reopening economy, plus the prospect of interstate travel and a travel ‘bubble’ with New Zealand emerging. Over 3,000 trades were made involving shares in FLT, once again, with about two-thirds being buy orders.

 

Purchases
Code Security
1 BBOZ Betashares Australian Equities Strong Bear Hedge Fund
2 VAS Vanguard Australian Shares Index ETF
3 Z1P Zip Co
4 FLT Flight Centre
5 WBC Westpac
6 CBA Commonwealth Bank
7 GEAR Betashares Geared Australian Equity Fund
8 ANZ ANZ
9 FMG Fortescue Metals Group
10 CSL CSL

 

Sales
Code Security
1 BBOZ Betashares Australian Equities Strong Bear Hedge Fund
2 Z1P Zip Co
3 CBA Commonwealth Bank
4 VAS Vanguard Australian Shares Index ETF
5 WBC Westpac
6 FLT Flight Centre
7 GEAR Betashares Geared Australian Equity Fund
8 CSL CSL
9 ANZ ANZ
10 FMG Fortescue Metals Group

 

The U.S Equities Strong Bear Fund (ASX: BBUS) fell out of the top 10 most-traded stocks as trading interest, particularly buying volume in the ETF eased, down more than 25% after a 28% decline the month prior. Afterpay was also an absentee from the most-traded stocks, somewhat surprisingly given the disproportionate rise in SelfWealth member holdings compared with the corresponding share price gain. However, as alluded to earlier, the value of sell orders for APT shares plummeted almost 60% month-on-month, suggesting more shareholders were keen to ride their profits.

Finally, shares in SplitIt (ASX: SPT) and Novonix (ASX: NVX) posted record interest by trade numbers, with more than 2,700 trades involving SPT, and over 1,800 trades involving NVX. Given both stocks recorded significant share price improvements across the month, it appears numerous SelfWealth members were intent on trying to follow the price action.

 

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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