Key takeaways: 

• Despite strong returns and achieving new highs, bank shares recorded a notable increase in selling activity across the Selfwealth community last month. 

• In July, trade volumes and buying conviction increased for each of the top 10 most actively traded ETFs. 

While recent days have been defined by a resurgence in market volatility, it was a different story throughout July, where the local market surpassed 8,000 points, setting a record in the process. 

The S&P/ASX 200 gained 4.2% over the course of the month, largely buoyed by shares from the Financials sector, including the ‘Big Four’. Meanwhile, a weak showing from Materials shares put a ceiling on the market’s advance. 

What were Selfwealth members buying and selling ahead of the market sell-off at the start of August? These are the key talking points from last month’s trading activity. 

ASX share trading activity 

For the first time on the Selfwealth platform, Droneshield (ASX: DRO) was the most traded share through any given month, edging out a host of stalwarts that often top the list. In fact, the total number of trades in Droneshield was roughly double those of Pilbara Minerals (ASX: PLS), a long-time favourite within the community. 

Month-over-month, trades in DRO increased 144%, which coincided with significant volatility for the AI-optimised platform for protection against drones and autonomous systems. Following on from recent contract wins, the stock was at one stage up more than 50% for the month, before a subsequent decline of similar magnitude. However, in total, 58.5% of all Selfwealth trades in DRO were ‘buys’, with a large portion of those trades occurring during the share price decline. 

Last month saw varying levels of conviction for blue-chip names. While resources shares such as BHP (ASX: BHP), Fortescue (ASX: FMG), Pilbara Minerals, Woodside (ASX: WDS), and Rio Tinto (ASX: RIO) enjoyed buying support among Selfwealth members, it was a different story for the three banks among the top 20 most actively traded shares.  

Trading activity in ANZ (ASX: ANZ), Westpac (ASX: WBC), and Commonwealth Bank (ASX: WBC) skewed towards selling, with Westpac faring the worst, where around seven out of every ten trades were sell orders. This weakness may have had something to do with the strong performance of said shares, which rallied to all-time or multi-year highs. 

As buy-now pay-later operator Zip (ASX: ZIP) delivered a return of 30.8% for the month, trading interest also surged. The stock, which ranked 14th for trade volumes in June, jumped to 7th in July. In addition, buying conviction also turned around dramatically, with the buy-sell ratio increasing 13.5 percentage points such that buying activity represented most executed trades. 

By far the smallest name among the most actively traded shares in the Selfwealth community last month, AML3D (ASX: AL3) highlights the diversity of investors’ interest. With a market cap well under $100 million, the share likely garnered attention among traders on account of an early-month spike, whereby the stock more than doubled after announcing the sale of a 3D printing system to a US Navy component supplier. Nearly two-thirds of all trades in AL3 were ‘buys’, with the stock ranking 16th for trades across all ASX-listed companies, its highest ever placing. 

Investors took to ETFs in greater numbers last month, with each of the top 10 most popular funds not only recording an increase in trade volumes, but higher buying conviction as well. 

For example, the most actively traded fund in the Selfwealth community, the Vanguard Australian Shares Index ETF (ASX: VAS), recorded a 24% increase in trade volumes month-over-month.  

Enthusiasm was most pronounced among ETFs offering exposure to international shares, with trade volumes in Vanguard MSCI Index International Shares ETF (ASX: VGS), Betashares Nasdaq 100 ETF (ASX: NDQ), and iShares S&P 500 ETF (ASX: IVV) rising at least 50% over the month and accompanied by improvements in buying conviction of at least 4.0 percentage points in each instance. 

In keeping with the above popularity related to ETFs, eight out of the top 20 most actively traded securities by value were ASX-listed funds.  

Although this included names like VAS, VGS, NDQ, and IVV, it also extended to leveraged products such as the Betashares Geared Australian Equity Fund (ASX: GEAR), Australian Equities Strong Bear Hedge Fund (ASX: BBOZ), and Global X Ultra Long Nasdaq 100 Complex ETF (ASX: LNAS).  

Of note, nearly 85% of money flow in NAB (ASX: NAB) related to Selfwealth members selling the bank stock. Since we started tracking trading activity across the community, this is one of the lowest conviction readings for any ASX-listed security, with the result influenced by a disproportionate number of investors selling above-average sized holdings in NAB. 

At the other end of the spectrum, BHP (ASX: BHP) commanded the most money flow of any security on the platform. The total value of BHP shares traded in July was up more than 85% versus the prior month, with the average trade size increasing over 20% to approximately $62,000. 

What are the most popular ASX shares and ETFs? 

For the second straight month, Commonwealth Bank reset its all-time high. Last month saw investors focus on the prospect of interest rate cuts in the United States, while local inflation data was less than feared. Community holdings in CBA grew by nearly 13% over the month, with the stock nearly eroding what was a significant gap in value between it and Neuren Pharmaceuticals (ASX: NEU), such that the difference between the two was only 0.03% by month’s end. 

In third spot, CSL (ASX: CSL) overtook Westpac, which followed heavy selling activity in the latter. This activity was likely due to profit taking, because by the end of the month, the collective value of shares in WBC across the community had still grown by 3.0% considering the company’s underlying share price increase. 

On the other hand, notwithstanding strong buying support among Selfwealth members, Woodside and Fortescue both lost out, with the duo each slipping a place to 10th and 12th positions respectively.  

Based on the value of Selfwealth members holdings in FMG, that result was the worst since January 2021, when the stock was ranked the 13th, most held by value. The iron ore miner’s share price tumbled late in the month as a major shareholder disposed of $1.9 billion worth of shares in the company. 

Last but not least, Flight Centre (ASX: FLT) rejoined the top 20, with its last appearance being back in March 2024. Taking out 19th place in the Selfwealth community, shares in the travel agency group delivered a double-digit return in July, despite the market reacting negatively to the company’s FY24 trading update. 

There were minor changes in terms of the popularity of ETFs on the Selfwealth platform. The Betashares Australia 200 ETF (ASX: A200) swapped places with Vanguard US Total Market Shares Index ETF (ASX: VTS), in 6th and 7th respectively, while the Betashares Diversified All Growth ETF (ASX: DHHF) leapfrogged Vanguard Australian Shares High Yield ETF (ASX: VHY) to take out 8th spot. 

On the back of strong broad-based rallies in international markets, the Vanguard All-World Ex-US Shares Index ETF (ASX: VEU) also found itself back in the top 10. During the month, the fund returned nearly 4%, largely on account of a notable rally in Japanese equities, albeit that momentum has wavered following a historic drop for the Nikkei 225 in the opening days of August. 

As always past trends and performance are not an indicator of future trends and performance. 

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