This article was produced 11 February 2025.

Key takeaways: 

• Selfwealth investors showed strong buying conviction towards stocks that recorded strong share price declines through January. 

• Overall sentiment in ASX-oriented ETFs dropped markedly over the month. 

• Bank stocks continued to record net outflows across the community. 

• It is important to always do your own research before making decisions to invest. Past performance is not an indicator of future performance. 

The new year started on a positive note for the local market, with the ASX 200 delivering a 4.6% increase for the month. That was the best monthly result since December 2023, when the benchmark index gained 7.1%, and it was also the best January return in two years. 

Tech shares and Materials stocks were among the best performing cohorts, as were the Financials and Consumer Discretionary sectors.  

As investors took encouragement from local inflation data that showed ongoing progress towards the Reserve Bank of Australia’s target, these were the most popular trades across the Selfwealth platform. 

ASX share trading activity 

Iron ore giant BHP (ASX: BHP) was the most traded stock in the Selfwealth community in January, and trade volumes in the mining name were up almost 50% over the month. That coincided with the stock circling a 52-week low. However, community sentiment was largely supportive for BHP, with nearly two-thirds of all trades being buys. 

Next up, the second most actively traded ASX name on the platform last month was buy-now pay-later operator Zip (ASX: ZIP). Market-wide, investors were left bewildered after the stock’s share price plunged more than 25% in a single session, while the overall decline for the month was 17.6%.  

The sell-off in January was connected to the company’s second-quarter results. Despite showing strong growth in revenue, total transaction volume (TTV), and EBITDA, the results also illustrated declining margins. Selfwealth investors bought shares following the sell-off, with 62.5% of all January trades in ZIP being buys. 

Climbing from eighth spot in December, to fifth spot in January, Appen (ASX: APX) was also on investors radars. While the stock see-sawed through the month, its quarterly report proved a decisive factor in the stock recording a 35% increase in monthly trade volumes. 

Coming off a strong 2024, Brainchip (ASX: BRN) captured buyers' attention, while trade volumes surged 44%. Although shares in the chip designer were off more than 15% across the course of the month, with an initial headwind being the company’s decision to raise capital via a Put Option Agreement (POA), Brainchip was another example of a stock where investors seemingly proved happy to ‘buy the dip’. 

In 12th position, Star Entertainment (ASX: SGR) found itself among the most traded names. The casino operator has regularly been in the news of late, and last month proved no exception as the market digested the company’s financial viability.  

In a trading update issued to the market, management reported the company eroded over $100 million of cash in the December quarter, leaving the business with just $79 million in the bank at the end of the year. But for all the uncertainty surrounding the company’s financial outlook, and a share price that tumbled nearly 40%, SGR yielded the highest buying conviction of any top 20 name for popular trades on the Selfwealth platform. 

Among the other shares garnering strong interest last month were Novonix (ASX: NVX) in 17th spot, and Woolworths (ASX: WOW), in 19th, each with a buy-to-sell ratio above 65%. 

While buying conviction for US-oriented funds was broadly comparable over the month, there was a marked decline in sentiment for ASX-oriented funds. 

The Vanguard Australian Shares Index ETF (ASX: VAS) recorded a 10.3 percentage point decline in buying conviction, while buying sentiment for the Betashares Australia 200 ETF (ASX: A200) fell by 9.0 percentage points over the month. 

Overall, the ETF with the highest buying sentiment was the iShares S&P 500 ETF (ASX IVV), with 89% of all trades being buys. This was the highest level for the fund since May 2024. 

What are the most popular ASX shares and ETFs? 

As the total value of Commonwealth Bank (ASX: CBA) shares reached a record high on the Selfwealth platform. 

Meanwhile, Australia’s major banks all recorded mid-single digit growth in community holdings, with NAB (ASX: NAB), sixth, up 6.4%, followed by ANZ and Macquarie Group in seventh and eighth respectively, with said holdings growing by 4.3% and 5.8%. 

Other movers among the top 20 included Wesfarmers (ASX: WES), which gained one spot to take out 11th position, Pilbara Minerals (ASX: PLS), up one spot into 18th, and Qantas (ASX: QAN), which re-entered the top 20 after a two-month absence. 

Of all the stocks in the top 20, Wesfarmers commanded the second highest growth rate of any name, with community holdings surging by 7.1%. That put WES within touching distance of blue-chip peers Woodside Energy and Fortescue, with the difference limited to less than two percent. 

The consumer giant benefitted as the stock received an upgrade from Goldman Sachs from ‘Neutral’ to ‘Buy’, with the broker noting growth potential tied to market share gains for Bunnings, and the potential for Wesfarmers to scale its lithium and healthcare businesses. 

The top 9 of the top 10 funds recorded an increase in the value of community holdings by a low-to-mid single-digit percentage, led by Vanguard US Total Market Shares Index ETF (ASX: VTS), which increased by 6.1%.

That’s all for this Trade Trends report, stay tuned for the next edition this time next month!