Retail investors around the world are pouring money into US tech stocks amid the recent rally in global share prices, new data from eToro reveals.
Fresh statistics show investors are flocking towards the high-growth US tech scene, which is seen by many as the main driving force behind the recent upturn in markets.
The number of retail investors buying shares in Microsoft, Facebook, Apple, Alphabet (Google), and Netflix in June surged by 55 percent, 124 percent, 103 percent, 111 percent and 69 percent, respectively compared with the previous month, the data shows.
There was also a large rise in the number of people buying in NVIDIA (+27 per cent), Disney (+66 per cent) and US semiconductor firm Advanced Micro Devices (70 per cent).
2020 has been one of the most remarkable years on records for markets and a rollercoaster for investors. Not only have we seen the biggest market sell-off in history, which wiped trillions of dollars off share prices, but also one of the quickest recoveries. US markets have just seen their best quarter in over a decade.
The rally in global share prices is being driven by the US tech giants, particularly in the past few weeks. Therefore, it’s not surprising that investors want to latch onto these fast-growing behemoths after what was a hugely painful shock to markets earlier this year.
That said, while a lot of tech companies are currently showing strong signs of growth, many of them are very expensive compared to their earnings. While that is not necessarily a bad thing, it means gaining exposure to that growth in your portfolio can come at quite a hefty price.
Adam Vettese, analyst at eToro
The latest monthly data comes as eToro, which has 13 million registered users globally, reveals that it’s trading volume in the first half of the year was over $600bn, up 130 percent from the same period last year.
| Most invested stocks by clients globally Etorro | |||
| June rank | Stock | Percentage change in trading activity | May rank |
| 1 | Microsoft | 55% | 1 |
| 2 | 124% | 10 | |
| 3 | Apple | 103% | 7 |
| 4 | Disney | 66% | 5 |
| 5 | Advanced Micro Devices | 70% | 6 |
| 6 | Alphabet (Google) | 111% | 13 |
| 7 | Nvidia | 27% | 4 |
| 8 | Amazon | 15% | 3 |
| 9 | Netflix | 69% | 14 |
| 10 | Mastercard | 86% | 17 |
The influx of money from the retail side. On sites like Etoro and Robinhood has been allocated in interesting ways. Particularly due to the common themes in this investment. Institutional money and retail (less sophisticated) have followed pretty common themes.
It seems like all investors have ridden the growing wave post the COVID crash hand in hand. The lack of a disconnect has certainly been interesting.
Another interesting tidbit is the account creation across the democratized platforms over the past three months. Both Etorro and Robinhood have seen massive upswells in account creation and dollars invested.
Analyzing this new money and the patterns it follows in the coming months will be interesting for all involved.
