Key takeaways:

• Energy, biotech, and mining were key segments responsible for notable changes in trading activity and holdings across the Selfwealth community in May.

• In terms of money flow, Westpac, which declared a special dividend last month, was the only ‘Big Four’ bank to record net buying activity, although ANZ achieved that feat for trade volumes.

With federal budget spending in focus, and inflation remaining a persistent theme, May brought several bouts of volatility to the local market. At one stage, the benchmark S&P/ASX 200 index was up 2.8% for the month, before ultimately concluding the month with a modest gain of 0.5%.

Rate-sensitive shares largely benefitted from an overseas lead, with US inflation appearing to moderate once again, offering support to the utilities, real estate, and consumer staples sectors. Meanwhile, subdued performances across the materials and energy sectors capped gains for the ASX. 

Which shares showed buying interest last month? Which shares fell out of favour? Let’s look at Selfwealth trading activity for May.

ASX share trading activity

A host of familiar shares were among the most actively traded names in the Selfwealth community last month, including the likes of BHP (ASX: BHP), Telstra (ASX: TLS), and Woolworths (ASX: WOW), with strong buying support across the trio. As it so happens, approximately three-quarters of all trades in TLS and WOW were buy orders, which followed a period of share price weakness for the pair.

Telstra touched a 52-week low, despite announcing that it expects underlying EBITDA to increase to between $8.4 billion and $8.7 billion in FY25, largely thanks to a $350 million cost reduction plan. Nonetheless, the company also opted to refrain from passing inflation-linked price increases on its mobile services, which Goldman Sachs cited as a negative factor.

There were also several shares that garnered strong trading interest after an extended period without featuring among the top 20 most popular trades, with major announcements playing a pivotal role in driving trading activity.

For example, take Vulcan Energy Resources (ASX: VUL). The aspiring net zero lithium producer was the 8th most traded ASX-listed share in the Selfwealth community last month. That coincided with a yearly high for the VUL share price, and a slight majority of Selfwealth trades being ‘buys’. During the month, the company informed shareholders of its efforts to secure project-level financing, drawing attention to interest from a range of third parties.

Another company that circled 52-week highs was Boss Energy (ASX: BOE), which ranked 12th for trades among Selfwealth members. In May, the company released two pieces of price-sensitive information. First, commissioning at its Honeymoon uranium project was proceeding to plan, with first sales expected by July. Secondly, BOE also announced the first results of its copper exploration project. In the background, the US signed into law a ban on uranium imports from Russia, while also releasing nearly US$3 billion in government support to rebuild the US nuclear fuel industry.

At the start of the month, AGL Energy (ASX: AGL) delivered an updated guidance for FY24, which saw its shares climb sharply higher. Management upgraded both EBITDA and NPAT forecasts “due to improved plant availability, flexibility and generation, and higher consumer demand”, among other factors. In 17th spot, it was the first time that AGL featured among the most traded ASX shares in three months.

On the other hand, Dimerix (ASX: DXB) made its inaugural appearance in the top 20, one spot behind AGL, in 18th. The biopharmaceutical company, which is working on a portfolio of drug candidates for inflammatory diseases, announced it entered an exclusive licence agreement with Taiba to commercialise its DMX-200 treatment for Focal Segmental Glomerulosclerosis in the Middle East.

In the ETF space, there was a decline in buying conviction for Vanguard Australian Shares Index ETF (ASX: VAS) and Vanguard Diversified High Growth Index ETF (ASX: VDHG), with the pair seeing their buy-to-sell ratios drop 9.0 percentage points and 5.2 percentage points respectively when compared with figures from April.

The above results might be due to the flat performance of the ASX last month, as opposed to US indices, which delivered significantly higher returns. Buying conviction for US-oriented ETFs was broadly consistent month-over-month, and in some instances, such as with the iShares S&P 500 ETF (ASX: IVV) and the Vanguard U.S. Total Market Shares Index ETF (ASX: VTS), even increased, further reinforcing the prospect that investors instead looked to the world’s largest share market for direction.

As far as money flow, ANZ (ASX: ANZ) was out in front for all Selfwealth trades by value. In fact, compared with figures from April, the total value of ANZ shares traded in May was nearly triple that from a month prior.

As was the case two months ago, when ANZ also led by this metric, most capital shifting through ANZ was an outflow, with 46.7% of all trades by value attributable to buyers. This was among the lowest conviction ratings in the top 20, with only BHP (ASX: BHP - 46%), Commonwealth Bank (ASX: CBA - 27%), and South32 (ASX: S32 - 41.4%) faring worse.

One of the prevailing themes investors were likely monitoring last month was reporting season for the ‘Big Four’. Each of the major banks noted an increase in the number of customers who are late on loan repayments, which may have influenced sentiment among Selfwealth members in this segment - net money flow also skewed towards an outflow for NAB (ASX: NAB). However, Westpac (ASX: WBC) bucked the trend, with 53.7% of money flow in WBC tied to buying activity. It was also the only bank that declared a special dividend as part of its earnings results.

What are the most popular ASX shares and ETFs?
Rejoining the top 10, Woodside Energy (ASX: WDS) was supported by strong buying activity across both trade volumes and trade values. The total value of WDS shares in the Selfwealth community grew nearly 5% over the month, notwithstanding a more than two-year low for the stock, and a modest decline during May. Weaker oil prices may have weighed on Woodside’s share price, but Selfwealth members seemingly looked past the volatility to ‘buy the dip’.

Pilbara Minerals (ASX: PLS) lost out two spots, rounding out the month in 15th position, the lowest ranking for the lithium miner within the Selfwealth community since June 2022. Net selling pressure was responsible for an outsized decline in holdings compared with the underlying share price performance of PLS, however, investors didn’t shy away from the lithium segment altogether, with Liontown Resources (ASX: LTR) rejoining the top 20 for the first time since February.

Finally, both the Betashares Nasdaq 100 ETF (ASX: NDQ) and the Vanguard Australian Shares High Yield ETF (ASX: VHY) moved up the list of the most popular ETFs, ranking 5th and 8th respectively. Their gains came at the expense of the Betashares Australia 200 ETF (ASX: A200) and the Betashares Diversified All Growth ETF (ASX: DHHF), which finished the month in 6th and 10th positions respectively.

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