Mum and dad investors have shown record levels of engagement in the sharemarket through the pandemic and are enjoying success swimming against the tide, according to new data from nabtrade.

As working from home becomes the norm, retail investors have been trading more regularly, with the ‘buy now, pay later’ sector drawing remarkable interest over the past three months.

• New applications to nabtrade increased by 360 per cent in past quarter
• Investor interest in airline and travel shares soared in anticipation of restrictions lifting
• Working from home has coincided with more active trading, with volumes doubling

Investment in offshore markets also hit a new peak in March, with trading values trebling at a time when investors were finding a unique way to capitalise on stunning oil price moves.

nabtrade Director SMSF and Investor Behaviour, Gemma Dale, said retail investors had been responsive and active throughout the crisis, with new nabtrade applications rising 360 per cent, trading volumes lifting 95 per cent and logins up 50 per cent across March, April and May.

“We have never seen interest from mum and dad investors to this extent. It appears the market’s rebound from the lows in the GFC, is fresh in their memories and there’s a determination to make sure they don’t miss out on any rally,” Ms Dale said.

“We noted a rush to start investing as March wore on, with a record six-fold jump in new applications in the week the market reached its low point.

“As this rapid growth has slowed steadily, so too have we seen a change in the focus of retail investors edging away from the comfort of blue chips.”

Bargains vs blue chips

The data shows a willingness for retail investors to act contrarian – with significant investments in the likes of Qantas and Afterpay, at a time when their stock was testing multi-year lows. Australia’s national carrier has remained a popular option through May as its share price recovers, although buying interest in Afterpay has started to taper off as it tests record highs.

And while blue chips in the resources, telecommunications and healthcare sector were in heavy demand in February and March, over the past six weeks household names like CSL, BHP and Telstra have fallen out of favour in preference for Webjet, Flight Centre and Zip Co. Blue chip banking shares have remained the most popular trades throughout, however, and performed very well for those that bought in March and April.

“There’s often a perception that retail investors are naïve and run at the first sight of trouble,” Ms Dale said. “But our data shows quite the opposite: there was strong buying in the most manic days of the fall and investors willing to take profits in the strongest days of the rally.

“We see retail investors through the nabtrade platform that are contrarian by nature and they have taken advantage of buying opportunities through this crisis. There’s still large amounts of cash coming into the nabtrade platform, with much of it still to be put to work as investors await any new opportunities.”

For those investors looking overseas, Tesla and Microsoft have remained the two most popular trades but the ProShares Ultra Bloomberg Crude Oil Exchange Traded Fund (ETF) made its way into the top five trades of the month for the first time in March. The ETF has bounced almost 170 per cent off its March low as US oil prices recover from an extraordinary negative reading in April. There was also no shortage of brave investors willing to buy shares in hard-hit cruise ship company Carnival shares in April.

More time to trade?

The data reveal greater activity during the trading day (and the hour prior) than previously, with 93.3 per cent of desktop visits occurring between 9am and 4pm, as against 86.4 per cent pre-crisis when working from home was less prevalent. Site visits are up 50 per cent, with desktop the primary driver of growth to the site.

“Some Australians have felt busier than ever, with parents taking to the task of juggling working from home while helping their children with online schooling,” Ms Dale said.

“However, there’s also been many Australians embracing the flexibility of working from home and having fewer events and activities to plan for and attend, creating more time to trade during the day – not to mention fewer co-workers looking over their shoulder.”

nabtrade data

• Trading volumes (March-May average vs February): +95%
• Trading values (March-May average vs February): +60%
• New account openings: +360% across March, April and May (Five-fold increase in March and a three-fold increase in April and May).
• Site visits: +51.8%
• Logins: +49.7%
• Device preference: Desktop – pre-covid 72.6%; post-covid 76.9%. Mobile – pre-covid 23.3%; post-covid 19.6%

Most popular ASX200 stocks by month – nabtrade platform (by volume)

Most popular international stocks by month – nabtrade platform (by volume)