Key takeaways:

• Buying conviction increased across several resources' shares, particularly those spanning iron ore and lithium.

• The BetaShares Nasdaq 100 ETF was one of just two ETFs among the most popular funds on the Selfwealth platform where buying conviction increased over the month, with most names in this segment seeing a pull-back in their buy-to-sell ratios.

As the financial year ended, the benchmark S&P/ASX 200 delivered a return of 7.8%, before dividends. During the month of June, the index gained 0.9% as the market offered support to the consumer staples, consumer discretionary, healthcare, and financials sectors.

On the other hand, there was plenty of red ink across the materials sector, with the S&P/ASX 200 Materials index down more than 5% for the month. Weak returns from the industrials and real estate sectors also put a ceiling on the local market’s advance last month.

Concerns about local inflation, and fluctuations in commodity prices made for several interesting trading trends, which we’re covering below.

ASX share trading activity

Resources shares were a dominant trading theme on the Selfwealth platform last month, led by the likes of iron ore duo BHP (ASX: BHP) and Fortescue (ASX: FMG), in addition to lithium shares such as Pilbara Minerals (ASX: PLS), Mineral Resources (ASX: MIN), Liontown Resources (ASX: LTR), and Vulcan Energy Resources (ASX: VUL).

 While there were weak returns from a number of these names last month, the community expressed strong buying conviction towards these shares in every instance bar one. Liontown Resources commanded the highest buy-to-sell ratio at 75.9%, which meant roughly three out of every four trades were buys. The same metric exceeded 60% for BHP, FMG, PLS, and MIN, with Vulcan Energy being the exception, where a slight majority of trades were sells. 

These figures represented a marked turnaround month-over-month, with buying conviction in Pilbara Minerals up nearly 15 percentage points, Fortescue up more than 13 percentage points, and BHP up nearly 10 percentage points. In effect, Selfwealth members actively bought the dip in these shares.

Surging more than 50%, Droneshield (ASX: DRO) caught the attention of the broader market, and it seems community members were also taking note, with the share ranking fourth for Selfwealth trades last month.

The company has been one of the top performers in 2024, with year-to-date gains of nearly 430%. Last month, the share price was supported by news that Droneshield won a $4.7 million contract for multiple vehicle-based C-UxS systems from a new customer, with further material orders “anticipated” from the government agency.

Summit Minerals (ASX: SUM) found some traction among Selfwealth members, ranking eighth for trades in June. The company released several price-sensitive announcements last month, with a particular emphasis on high-grade niobium assay results from its Ecuador Project in Brazil. In 2022, niobium was included on the United States Geological Survey's Critical Minerals List, and a year later the Australian Government followed suit.

Despite at one stage being the most popular ASX share in the Selfwealth community, CSL (ASX: CSL) finished the financial year amid a wave of selling activity. Shares in the biotech giant gained more than 5% through June, but with the stock circling a 52-week high, that appears to have prompted some profit taking.

More than three out of every four trades in CSL last month were ‘sells’, with the share recording a buy-to-sell ratio of just 24.4%. This was the lowest level of conviction among any of the top 20 most actively traded names, and it is among the all-time lowest conviction ratings for any share in this month-to-month cohort.

After a strong couple of months where buying conviction across various ETFs increased, last month saw a reversal. In fact, of the nine ETFs that featured among the top 10 trades for both months, seven of the funds saw a decline in buying conviction as measured by the drop in their buy-to-sell ratios.

The largest of these declines was for the Vanguard U.S. Total Market Shares Index ETF (ASX: VTS), where its buy-to-sell ratio fell nearly 13 percentage points. Of the two exceptions, one was the Betashares Nasdaq 100 ETF (ASX: NDQ), which suggests Selfwealth investors may retain a bias of some sort towards ETFs for gaining exposure to large-cap tech shares, especially with the Nasdaq at a record high.

Compared with the preceding month, there was also a contrast in money flow for bank shares. Each of ANZ (ASX: ANZ), which ranked sixth by money flow, Westpac (ASX: WBC), seventh, Commonwealth Bank (ASX: CBA), 13th, and NAB (ASX: NAB), 18th, recorded a buy-to-sell ratio well below 50%, resulting in net outflows of cash based on trades across the Big Four.

What are the most popular ASX shares and ETFs?

. In fact, at one point, CBA inched within touching distance of surpassing BHP for the largest company on the ASX by market cap. Among the potential tailwinds supporting the banking sector in 2024, investors have focused on looming rate cuts from overseas central banks.

Iron ore titan Fortescue (ASX: FMG) lost out in June, falling two places to 11th among the most held shares by value. The last time FMG was ranked as low as this was back in July 2023, when the stock was trading at a comparable price.

During the month, FMG shares declined 13.5%, although net buying support within the Selfwealth community helped stem the decline in Selfwealth FMG holdings to 9%. Weaker iron ore prices were a prevailing theme last month, but the stock’s largest daily decline coincided with a notable selldown by a large FMG shareholder, likely to have been an institutional investor.

Elsewhere, Pilbara Minerals (ASX: PLS) descended two spots, matching its result from May. This time last month that meant PLS was at its lowest position within the Selfwealth community since June 2022, however, considering this latest slip, Pilbara’s popularity, as measured by the total value of holdings among Selfwealth members, is at its lowest point since November 2021.

The collective value of shares in PLS fell 17.1% last month, broadly in line with the underlying share price decrease (-19%) prompted by weaker lithium prices. Throughout much of 2024, Pilbara Minerals has recorded the highest level of short interest among any ASX-listed company, and at the time of writing, with 21.2% of all securities on issue being sold short, its short interest is almost 10 percentage points higher than the next most-shorted stock.

For the first time since January this year, Whitehaven Coal (ASX: WHC) was back among the most popular names on the Selfwealth platform, sliding into 19th spot, and skipping past names like Qantas (ASX: QAN), which shed one place. Shares in WHC declined by more than 5% last month, however, Selfwealth members expressed significant interest in the coal exporter, such that collective holdings in WHC swelled by more than 10%, at a time where much discussion has centred on the make-up of the future local and global energy mix.

At the same time, the highest growth in holdings was centred on ETFs with US exposure, including the iShares S&P 500 ETF (ASX: IVV), Betashares Nasdaq 100 ETF (ASX: NDQ), and Vanguard US Total Market Shares Index ETF (ASX: VTS), with all recording a mid-single-digit growth rate last month.

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