Key takeaways:

• The year ended with above-average selling activity across numerous sectors, including ETFs, but one notable exception was the lithium segment

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Capping a positive year for the local share market, the ASX advanced 7.1% in December. As it turned out, those gains accounted for almost all of the market’s yearly gains. In 2023, the S&P/ASX 200 index returned 7.8%, marking its best performance since 2021, when the index leapt 13%.

All of the market sectors were in the green last month, but the strongest contributions came from health care stocks, materials such as iron ore and lithium, as well as rate-sensitive shares from the real estate and consumer discretionary sectors.

It’s time to recap the most popular stocks on the Selfwealth platform from December.

ASX share trading activity

Once again, lithium was a dominant trading theme, continuing a trend that has been in place for the best part of over two years. Pilbara Minerals (ASX: PLS) took out top spot for the sixth month in a row, with nearly double the volume of trades of the next most actively traded stock.

Meanwhile, the likes of Core Lithium (ASX: CXO), ranked 9th, Liontown Resources (ASX: LTR), 10th, and Sayona Mining (ASX: SYA), 18th, were also popular. One of the more interesting observations arising from this cohort was that buying activity dominated trading. Each stock recorded a buy-to-sell ratio above 50%. That was in contrast to most of the other top 20 names, suggesting long-term bullishness towards lithium.

Woodside Energy (ASX: WDS) was another popular trade among the bulls. The oil and gas juggernaut rose from number five in November to second place among the most traded stocks in December. A catalyst for this interest was news that the company was in discussions with industry peer Santos (ASX: STO) regarding a potential merger that would see the two companies potentially create an energy titan.

Once a regular sighting among the most traded names on the Selfwealth platform, Zip (ASX: ZIP) was back among the top 20, this time landing in 11th spot. However, the stock’s appearance was mostly underpinned by selling activity, with just 42.9% of all trades being ‘buys’. Last month coincided with a strong performance from the stock, up 56%, which likely prompted some profit taking. A highlight for the company was that it landed new funding facilities to strengthen its balance sheet.

Also a popular trade in December was Appen (ASX: APX). It snuck into the top 20 by rounding out the list, and 57% of all trades were buy orders. While the tech sector performed well last month, both home and abroad, Appen failed to capitalise on that tailwind, with its stock flat across the month. Nonetheless, some investors may have pinned their hopes on the belief that the stock could be ‘oversold’, and the view that a sector-wide rally might help APX reverse recent losses. 

Top 20 Shares by Trade Volume

1. Pilbara Minerals (PLS) - Buy-Sell Ratio: 55.1%

2. Woodside Energy (WDS) - Buy-Sell Ratio: 66.0%

3. BHP (BHP) - Buy-Sell Ratio: 41.3%

4. Fortescue (FMG) - Buy-Sell Ratio: 40.6%

5. ANZ (ANZ) - Buy-Sell Ratio: 41.5%

6. Macquarie Group (MQG) - Buy-Sell Ratio: 43.3%

7. Westpac (WBC) - Buy-Sell Ratio: 28.5%

8. CSL (CSL) - Buy-Sell Ratio: 41.5%

9. Core Lithium (CXO) - Buy-Sell Ratio: 59.1%

10. Liontown Resources (LTR) - Buy-Sell Ratio: 64.1%

11. Zip (ZIP) - Buy-Sell Ratio: 42.9%

12. Evolution Mining (EVN) - Buy-Sell Ratio: 44.4%

13. Commonwealth Bank (CBA) - Buy-Sell Ratio: 23.2%

14. Neuren Pharmaceuticals (NEU) - Buy-Sell Ratio: 41.3%

15. ResMed (RMD) - Buy-Sell Ratio: 66.8%

16. Qantas (QAN) - Buy-Sell Ratio: 49.8%

17. Rio Tinto (RIO) - Buy-Sell Ratio: 34.7%

18. Sayona Mining (SYA) - Buy-Sell Ratio: 55.1%

19. National Australia Bank (NAB) - Buy-Sell Ratio: 21.7%

20. Appen (APX) - Buy-Sell Ratio: 57.0%

Among ETFs, buying activity was subdued compared to historical values, especially for ASX-listed funds. The buy-to-sell ratios for the Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) were down almost 17 percentage points and around 10 percentage points compared with November. 

On the other hand, conviction towards US funds was more in line with recent results. Buy-to-sell ratios for Vanguard MSCI Index International Shares ETF (ASX: VGS), Ishares S&P 500 ETF (ASX: IVV), and Betashares Nasdaq 100 ETF (ASX: NDQ) were up 2 percentage points, 0.6 percentage points, and almost 5 percentage points respectively.

Top 10 ETFs by Trades

1. Vanguard Australian Shares Index ETF (VAS) - Buy-Sell Ratio: 61.9%

2. Vanguard Diversified High Growth Index ETF (VDHG) - Buy-Sell Ratio: 61.1%

3. Vanguard MSCI Index International Shares ETF (VGS) - Buy-Sell Ratio: 78.1%

4. Ishares S&P 500 ETF (IVV) - Buy-Sell Ratio: 80.7%

5. Betashares Nasdaq 100 ETF (NDQ) - Buy-Sell Ratio: 73.4%

6. BetaShares Australia 200 ETF (A200) - Buy-Sell Ratio: 64.6%

7. Vanguard U.S. Total Market Shares Index ETF (VTS) - Buy-Sell Ratio: 68.7%

8. Betashares Geared Australian Equity Fund (GEAR) - Buy-Sell Ratio: 40.7%

9. Australian Equities Strong Bear Hedge Fund (BBOZ) - Buy-Sell Ratio: 67.3%

10. BetaShares Diversified All Growth ETF (DHHF) - Buy-Sell Ratio: 78.5%

Across the board, money flow heavily skewed towards selling activity as almost all of the top 20 stocks recorded a buy-to-sell ratio below 50%. This may be attributable to investors taking some money off the table to end the year. 

This was particularly evident among the banks, including ANZ (ASX: ANZ), Westpac (ASX: WBC), and Commonwealth Bank (ASX: CBA), where over 60% of all money flow were outflows from these stocks.

Uncharacteristically, money was also flowing out of popular ETFs like Vanguard Australian Shares Index ETF (ASX: VAS) and Vanguard Diversified High Growth Index ETF (ASX: VDHG), where 63% and 82.8% of money flow was driven by ‘sales’. 

One exception to the trend was strong buying in the Australian Equities Strong Bear Hedge Fund (ASX: BBOZ), with 57.7% of money flow tied to buy orders. These results suggest some portfolio rebalancing in anticipation of a market pull-back.

Elsewhere, there was also above-average money flow in names like ResMed (ASX: RMD) and Evolution Mining (ASX: EVN).

Top 20 Securities Traded by Value

1. Pilbara Minerals (PLS) - Buy-Sell Ratio: 47.8%

2. Fortescue (FMG) - Buy-Sell Ratio: 48.2%

3. Macquarie Group (MQG) - Buy-Sell Ratio: 45.1%

4. ANZ (ANZ) - Buy-Sell Ratio: 38.9%

5. Westpac (WBC) - Buy-Sell Ratio: 35.3%

6. ETFS Ultra Long Nasdaq 100 Hedge Fund (LNAS) - Buy-Sell Ratio: 49.5%

7. Betashares Geared Australian Equity Fund (GEAR) - Buy-Sell Ratio: 41.9%

8. BHP (BHP) - Buy-Sell Ratio: 41.5%

9. Australian Equities Strong Bear Hedge Fund (BBOZ) - Buy-Sell Ratio: 57.7%

10. Betashares Australian High Interest Cash ETF (AAA) - Buy-Sell Ratio: 46.8%

11. CSL (CSL) - Buy-Sell Ratio: 41.7%

12. Rio Tinto (RIO) - Buy-Sell Ratio: 38.9%

13. Vanguard Australian Shares Index ETF (VAS) - Buy-Sell Ratio: 37.0%

14. Woodside Energy (WDS) - Buy-Sell Ratio: 59.1%

15. ETFS Ultra Short Nasdaq 100 Hedge Fund (SNAS) - Buy-Sell Ratio: 47.5%

16. National Australia Bank (NAB) - Buy-Sell Ratio: 22.4%

17. Commonwealth Bank (CBA) - Buy-Sell Ratio: 32.3%

18. Vanguard Diversified High Growth Index ETF (VDHG) - Buy-Sell Ratio: 17.2%

19. ResMed (RMD) - Buy-Sell Ratio: 47.0%

20. Evolution Mining (EVN) - Buy-Sell Ratio: 48.2%

What are the most popular ASX shares and ETFs?

Thanks to another stunning return throughout December, Neuren Pharmaceuticals (ASX: NEU) extended its lead atop the list of the most held stocks in the Selfwealth community by value. The stock soared 61.1% last month thanks to positive results demonstrating significant improvement among patients during its Phase 2 trial of NNZ-2591 in children with Phelan-McDermid syndrome (PMS). At the end of 2023, Selfwealth members were holding over $350 million worth of NEU shares.

On the move again, CSL (ASX: CSL) rose one spot into third place. It was the second month in a row where the biotech gained ground, after previously falling to a platform-low ranking of fifth back in October. The health care sector delivered a strong return in December, up more than 9%, as was CSL. In contrast, the benchmark ASX 200 returned just over 7%.

The collective value of holdings in Fortescue (ASX: FMG) grew by 16.3% last month. That was broadly in line with the performance of the underlying stock, which hit a record high. Robust iron ore prices were responsible for the stock’s gains, with the price of the key steel-making ingredient surpassing US$140 per tonne as Chinese steel output advanced.

In terms of other major movers, Liontown Resources (ASX: LTR) may have slipped one spot to 19th, but the collective value of holdings in LTR increased by more than 25%, the third highest of any name in the top 20. Flight Centre (ASX: FLT) was also back in the fold, rejoining the top 20 after slipping out of the list back in October.

ASX Companies

1. Neuren Pharmaceuticals (NEU)

2. Commonwealth Bank (CBA)

3. CSL (CSL)

4. BHP (BHP)

5. Westpac (WBC)

6. ANZ (ANZ)

7. National Australia Bank (NAB)

8. Macquarie Group (MQG)

9. Fortescue (FMG)

10. Australian Foundation Investment (AFI)

11. Woodside Energy (WDS)

12. Wesfarmers (WES)

13. Pilbara Minerals (PLS)

14. Telstra (TLS)

15. Rio Tinto (RIO)

16. Washington H Soul Pattinson & Co. (SOL)

17. Argo Investments (ARG)

18. Woolworths (WOW)

19. Liontown Resources (LTR)

20. Flight Centre (FLT)

Almost all major ETFs recorded net growth in holdings on the Selfwealth platform last month, with the exception of the Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU). This fund saw a modest net reduction in holdings by value, although its spot inside the top 10 appears safe for the time being due to the gap with the next highest-ranking ETF. 

ASX ETFs

1. VAS - Vanguard Australian Shares Index ETF

2. VGS - Vanguard MSCI Index International Shares ETF

3. VDHG - Vanguard Diversified High Growth Index ETF

4. IVV - Ishares S&P 500 ETF

5. A200 - Vanguard U.S. Total Market Shares Index ETF

6. VTS - BetaShares Australia 200 ETF

7. NDQ - Betashares Nasdaq 100 ETF

8. VHY - Vanguard Australian Shares High Yield ETF

9. DHHF - BetaShares Diversified All Growth ETF

10. VEU - Vanguard All-World ex-U.S. Shares Index ETF

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