Despite investors getting more cautious, Sharesies says over $1.71 billion was traded through its platform during the September quarter.
It’s the highest quarterly trading volume in Sharesies' seven-year history, beating the platform’s previous all-time trading high of $1.28 billion in the June quarter.
Sharesies' latest index report was released on Tuesday, showing investor confidence on the platform fell over July to September.
Sharesies’ quarterly index reports gauge the sentiments of retail investors in New Zealand and Australia around wealth and investing trends.
The index aggregates anonymised data of over 700,000 Sharesies users and ranks confidence levels on a scale of 0 to 100, based on various metrics like buying/selling ratios and investment preferences.
Sharesies reported a drop in average investor confidence from July to September, marking a 14-point fall compared to the previous quarter of April to June.
That decrease pushed the confidence index down to 31 out of 100 which is the ‘cautious’ category according to Sharesies’ index.
The decline, while gradual across July and August, was more pronounced in September, Sharesies’ report found.
Sharesies believes the decrease in confidence was driven by uncertainty around interest rates, and the upcoming US election.
In the April to June quarter, meme stocks had moved up the ranking in the Sharesies Bundle – the 50 most owned investments on Sharesies – with GameStop (GME) and AMC Entertainment as the top movers.
Sharesies founder and co-CEO Leighton Roberts told interest.co.nz on Tuesday that Sharesies had seen far less investments in individual companies across July to September, with one reason potentially being investors waiting for the October earnings season.
Instead, exchange-traded-funds (ETFs) and managed funds were preferred by investors over companies during that period, particularly Australian ETFs.
Roberts said the Australian business was “fast-growing” for Sharesies and people were seeing the ASX as more of an opportunity than the NZX.
When it came to individual stocks, aerospace company Rocket Lab entered the top five companies in the Sharesies Bundle for the first time during the September quarter after an 115% rise in Rocket Lab’s share price.
Rocket Lab pushed Auckland International Airport to sixth place in the Bundle and now sits alongside Tesla, Apple, NVIDIA and Air New Zealand as the five most owned investments on Sharesies.
Tesla also saw a “surge” in its share price between July and September, up 24% across the quarter. However, Sharesies said the selling outpaced buying for the period, with the month of September recording the lowest buy-to-sell ratio.
Sharesies' net buy/sell ratio for the September quarter averaged 1.13. The platform’s net buy/sell ratio measures the gap between total buying and selling activity.
A ratio above one signals buying surpasses selling, suggesting confidence among investors. Sharesies’ net buy/sell ratio for the June quarter averaged 1.17.
Sharesies net deposit ratio – which measures the flow of funds into and out of Sharesies’ invest and save products – was up from the previous quarter averaging 1.7 in the September quarter.
Roberts said deposits were twice as high as withdrawals on Sharesies by the end of September which suggested investors are preparing for future investing back into the market.
“Investors have adjusted their behaviour to cope with uncertainty, rather than retreat more broadly, ” he said.
Deposits for the month of August were the second highest month of deposits since Sharesies was established in 2017.
Sharesies manages over $3.5 billion in funds and has over 700,000 users across NZ and Australia. The platform offers investing in shares, savings accounts, KiwiSaver and car insurance.
2 Comments
Great news.
If the US, most people with spare cash have a '401k'. There are two types. The traditional type is a little bit like Kiwisaver except contributions are pre-tax (with withdrawals being taxed). The other type is a "Roth 401k" where after-tax income can be contributed (with withdrawals being tax free). The Roth type 401k have been around since the 80s (See how much further ahead of us they are!)
Anyway, you can self-manage the investments made by your 401k if you choose to and many people do. (You can self-manage with Kiwisaver too if you're inclined.)
Lots of talk around water coolers and the BBQs of what people are investing in using their 401ks.
US water coolers and BBQs talk is much more fun. Kiwis just want to talk houses! (Sheesh!)
Oh goodie: promoting ever more churn and amateur day-traders who think they can beat the market, increasing the potential for more widespread carnage when things go South.
However, I do wonder what the turnover in ETFs is, given they are purpose built for buy-and-hold.
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