In total, the ASX 200 climbed 5.7% throughout the month, defying concerns about rising inflation, an aggressive rate hike cycle, and warning signs about the outlook for the global economy. 

The catalysts were largely overseas-based, with the start of the US earnings season proving slightly better-than-expected, and traders increasing their bets the US might be able to avoid a deep recession. At the same time, ASX banks found some favour, and commodity prices rallied into the month end.

With sentiment improving, here is what the Selfwealth community were buying and selling.

What are the most popular ASX shares and ETFs?

Banks were the major movers last month, with the financials sector benefitting from renewed confidence that rising interest rates may well turn out to be a net positive for the sector, offsetting any expected slowdown in lending and declining property prices.

Four of the leading five banks listed on the ASX all saw the value of their holdings increase by double-digit percentages in July, with NAB (ASX: NAB) leading the way courtesy of a 13.6% increase, while holdings in Commonwealth Bank (ASX: CBA), Westpac (ASX: WBC), and Macquarie Group (ASX: MQG) grew 11.8%, 10.3%, and 10.5% respectively. Each of these increases were directly in line with the share price performance of each stock for the month.

Trading updates from Macquarie Group and also ANZ (ASX: ANZ) provided a somewhat positive picture for the banking sector, with commentary by the former regarding strong asset management, and improving net interest margins for the latter affording shareholders some reason to feel optimistic. 

Selfwealth members currently hold around $650 million worth of shares between the leading five ASX-listed banks, up from $583 million a month prior. Despite bank stocks still being somewhat off their highs, this collective figure is an all-time record, surpassing the figure of $639 million seen at the end of March, and indicative of the overall popularity of these blue-chip names.

Elsewhere, BHP (ASX: BHP) held onto fourth position as the most held stock on the Selfwealth platform by value, although there is a hair separating it and NAB in fifth spot. The iron ore miner had a volatile month, down 6.2%, although monthly losses were at one stage double that. Nonetheless, despite the stock negative showing, the collective value of holdings in the stock increased by 0.8% in July, suggesting strong buying support.

Neuren Pharmaceuticals (ASX: NEU) moved higher into ninth spot among the most held stocks on the Selfwealth platform. The value of all holdings in NEU surged nearly 50%, with the stock having a bumper month after commencing the Phase 2 trial enrolment for its treatment of Angelman syndrome. Its US partner Acadia Pharmaceuticals also submitted a New Drug Application (NDA) to the US FDA for the treatment of Rett syndrome in adults and pediatric patients aged two and over.

Meanwhile, with risk-on sentiment returning, growth stocks were one of the biggest beneficiaries, and this is evident via the three lithium stocks in the top 20 most held ASX shares. 

Holdings in Pilbara Minerals (ASX: PLS) grew 22.5%, while Core Lithium (ASX: CXO) and Liontown Resources (ASX: LTR) both returned to the list after a short absence. 

A relatively robust report from US electric vehicle maker Tesla was one of the catalysts for buying action across the battery metals sector, but Core Lithium also reported a significant increase in its mineral resource estimate and ore reserve estimate at its Finniss lithium project, and Liontown deal with Ford in late June kept momentum flowing.  

After a positive month for global equities, just about every ETF in the top 10 most popular funds recorded a high single-digit percentage increase in terms of the value of all units held across the Selfwealth community. 

The only exceptions to this were the Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU), which underperformed due to its lack of exposure to US markets, while the Betashares Nasdaq 100 ETF (ASX: NDQ) outperformed as growth stocks returned to favour and the US market recorded its best monthly result since November, 2020.

ASX share trading activity

Iron ore miners were among the most actively-traded stocks in July, with BHP ranking third, Rio Tinto (ASX: RIO) in fourth, and Fortescue Metals Group (ASX: FMG) in 10th position. Between the trio, around $120 million worth of shares traded hands, and more than 3,000 orders were filled.

Weaker iron ore prices weighed on the sector through the first half of the month, with the commodity dropping below US$100 per tonne on demand concerns, but rallying thereafter. Selfwealth members were still keen to buy the dip when it came to BHP and RIO shares, with both circling yearly lows and drawing buyers from the sidelines. 

Lake Resources (ASX: LKE) had a turbulent month, with the lithium stock woes from June continuing into July, and compounded by a short report attacking the viability of the company main project and its lithium extraction technology. However, the share price slump also proved an entry point for a large number of buyers who took up a position in the stock, and there were nearly 1,000 trades in LKE last month - with over 60% being buy orders.

And finally, for the first time in a number of months, Zip Co (ASX: ZIP) was back among the list of the most traded stocks in the Selfwealth community. The former market darling, which is down over 85% from its all-time high, managed to string together a strong finish to the month that caught the attention of buyers. 

More than $16 million worth of ZIP shares were traded in July, and that was spread across nearly 1,100 trades. The company relief rally might be a blip on the long-term chart, but with a monthly gain of over 150%, the stock ended the month as the top ASX 200 performer. 

Zip was given a shot in the arm following its decision to scrap its merger with Sezzle, and after announcing a restructure of its operations to focus on core divisions and a goal to reach profitability sooner than anticipated.

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