Key takeaways:

• Resources and financials dominated the most traded stocks this year

• Tesla was the only US stock among the top 20 most popular trades

• Each of the top 20 shares (by volume) recorded a buy-to-sell ratio above 50%, despite most of these names delivering returns that trailed the broader market

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As the year comes to a close, investors may well look back and view 2023 as a year that defied many expectations. 

What seemed like an odds-on recession a year ago never arrived, but investors will be diligently checking forecasts in 2024. Likewise the fixed-rate mortgage cliff hasn’t arrived in full severity and data will be monitored ongoing. Global stocks also delivered some of their strongest gains outside the pandemic-era, with the Dow Jones recently setting a record high.

However, there were no shortage of big moves across a number of sectors as central banks aggressively tightened monetary policy, investors dealt with a banking crisis in the US, and a new war threatened to spill into region-wide conflict.

We’re taking a look at the most traded stocks on the Selfwealth platform in 2023, including insights behind investor behaviour, and some of the catalysts for actively traded shares.

Top 20 by Volume

1. Pilbara Minerals (ASX: PLS) - 61.1% Buy-to-Sell Ratio - Share Price Performance 2023: 4.5%

2. Fortescue Metals Group (ASX: FMG) - 51.1% Buy-to-Sell Ratio - Share Price Performance 2023: 35.8%

3. BHP (ASX: BHP) - 58.5% Buy-to-Sell Ratio - Share Price Performance 2023: 8.3%

4. Core Lithium (ASX: CXO) - 59.6% Buy-to-Sell Ratio - Share Price Performance 2023: -70.1%

5. Westpac (ASX: WBC) - 58.2% Buy-to-Sell Ratio - Share Price Performance 2023: -3.7%

6. ANZ (ASX: ANZ) - 57.8% Buy-to-Sell Ratio - Share Price Performance 2023: 8.0%

7. Macquarie Group (ASX: MQG) - 61.3% Buy-to-Sell Ratio - Share Price Performance 2023: 7.5%

8. Woodside Energy (ASX: WDS) - 56.6% Buy-to-Sell Ratio - Share Price Performance 2023: -13.7%

9. Whitehaven Coal (ASX: WHC) - 57.3% Buy-to-Sell Ratio - Share Price Performance 2023: -23.7%

10. CSL (ASX: CSL) - 64.3% Buy-to-Sell Ratio - Share Price Performance 2023: -3.1%

11. Tesla (NASDAQ: TSLA) - 69.5% Buy-to-Sell Ratio - Share Price Performance 2023: 105.8%

12. Commonwealth Bank (ASX: CBA) - 55.7% Buy-to-Sell Ratio - Share Price Performance 2023: 7.3%

13. Qantas (ASX: QAN) - 53.4% Buy-to-Sell Ratio - Share Price Performance 2023: -10.0%

14. Lake Resources (ASX: LKE) - 55.9% Buy-to-Sell Ratio - Share Price Performance 2023: -83.8%

15. Sayona Mining (ASX: SYA) - 66.3% Buy-to-Sell Ratio - Share Price Performance 2023: -65.8%

16. National Australia Bank (ASX: NAB) - 58.1% Buy-to-Sell Ratio - Share Price Performance 2023: 0.4%

17. Liontown Resources (ASX: LTR) - 51.1% Buy-to-Sell Ratio - Share Price Performance 2023: 9.9%

18. Allkem (ASX: AKE) - 56.4% Buy-to-Sell Ratio - Share Price Performance 2023: -6.9%

19. Mineral Resources (ASX: MIN) - 58.4% Buy-to-Sell Ratio - Share Price Performance 2023: -13.5%

20. Australian Foundation Investment (ASX: AFI) - 75.7% Buy-to-Sell Ratio - Share Price Performance 2023: -2.8%

Investor Behaviour Insights

Investors Prioritised Both Growth and Income

The top 20 stocks traded on the Selfwealth platform in 2023 were dominated by resources and financials, highlighting investor preference for a mixture of growth and income.

In terms of growth, there were seven stocks among the top 20 offering exposure to lithium. Pilbara Minerals (ASX: PLS) was the most traded stock in 2023, joined by peers including Core Lithium (ASX: CXO), Lake Resources (ASX: LKE), Sayona Mining (ASX: SYA), Liontown Resources (ASX: LTR), Allkem (ASX: AKE), and Mineral Resources (ASX: MIN). 

This trend unfolded despite lithium carbonate prices in China, the world’s largest producer, plummeting as much as 80% after Beijing slashed electric vehicle subsidies and concerns arose about a lithium supply surge outsizing forecasts for higher demand. 

Higher operating costs due to the inflationary environment also posed a challenge for miners margins. But investors clearly made these trades with a long-term outlook, backing the chemical element used in batteries at the centre of the expected EV revolution, despite returns that, on the whole, were significantly off the pace of the broader market.

On the other hand, Australia’s major banks remained as popular as ever, appealing to income-oriented investors. Concerns about higher rates and the fixed-rate mortgage ‘cliff’ did little to dampen enthusiasm as Westpac (ASX: WBC), ANZ (ASX: ANZ), Macquarie Group (ASX: MQG), Commonwealth Bank (ASX: CBA), and NAB (ASX: NAB) all boosted their dividends.

CBA, ANZ, and Macquarie achieved mid-to-high single-digit returns, before dividends, while Westpac and NAB lagged their peers. This was largely a reflection of investors’ views towards how each bank responded to increased mortgage competition, as well as their respective growth outlooks.

And then there were iron ore names like Fortescue Metals Group (ASX: FMG) and BHP (ASX: BHP), with their popularity underpinned by their mix of growth and income attributes. FMG delivered a big return for investors, setting a series of all-time highs throughout December, while BHP, also circling a 52-week high at the time of writing, saw the greatest money flow of any stock in the community. 

The iron ore segment’s resilience was on the back of strong iron ore prices in 2023, with the Chinese government playing a central role through a series of initiatives designed to support its economy, particularly the ailing property sector. At the same time, overseas iron ore competitors scaled back medium-term production targets, supporting iron ore prices.

As it were, the top 20 traded shares accounted for 21.9% of all trades in non-ETF securities throughout the year.

A Home-Grown Investment Bias

Trade numbers paint a clear picture that Selfwealth members retained a home-grown bias for ASX-listed stocks. Only one US-listed stock, Tesla (NASDAQ: TSLA), was among the most 20 traded names on the platform. 

With US indices significantly outperforming the ASX in 2023, and a number of high-profile FAANG companies also delivering large returns, there are several possible reasons for this preference.

First, investors demonstrated a preference for direct investing in thematic growth opportunities relating to battery metals. As a major mining jurisdiction, lithium stocks are overwhelmingly concentrated on the ASX. However, this goes some way towards explaining why Tesla, as an EV pioneer at the heart of the lithium supply chain, was the only US-listed name in the top 20.

Secondly, local investors with income objectives would have targeted ASX opportunities given many of the blue-chip favourites prioritise returns to shareholders via dividends, not to mention favourable tax treatment with regards to franking credits.

And thirdly, the popularity of ETFs that track US indices, rather than individual stocks, likely played a role encouraging investors to focus their individual stock selection on ASX names.

Nonetheless, when it came to money flow, several US shares like Bank of America (NYSE: BAC), Citibank (NYSE: C), and Apple (NASDAQ: AAPL) made the top 20 by value. This was a reflection of ultra-high conviction trading across a smaller investor cohort, and influenced by macro events including the regional banking crisis earlier in the year. 

Bulls Prepared to Go Against the Market

While technology is set to round out 2023 as the best-performing sector across the market, the sector recorded little to no presence in terms of the most traded stocks in the Selfwealth community. 

Among the top 20 most actively traded shares, not one stock came from the tech sector, albeit some may argue that Tesla, which is officially in the consumer discretionary sector, deserves a special mention.

In contrast, the energy sector, which was the worst performing sector in 2023 and weighed on the market throughout the year, was well represented with both Woodside Energy (ASX: WDS) and Whitehaven Coal (ASX: WHC) comfortably inside the top 10 by volume, and in the top 20 by value.

The data is broadly indicative of a wider trend, which showed that Selfwealth members were overwhelmingly ‘bullish’ across their views, and often wanted to ‘buy the dip’. As examples, this was seen with majority buying interest in underperformers like CSL (ASX: CSL) and Qantas (ASX: QAN).

A community favourite, CSL dealt with a number of headwinds this year. Higher bond rates increased the cost of the company’s capital, leading to share price weakness. A profit downgrade triggered by forex headwinds and below-forecast growth expectations also weighed. More recently, the rise in popularity of blockbuster weight loss drug Ozempic led some investors to reassess the clinical need for drugs used to treat kidney and heart diseases.

Meanwhile, a tumultuous year for Qantas saw the airline’s reputation in tatters at various stages, capped off by the ACCC’s allegations of false, misleading, or deceptive conduct, and the early departure of former CEO Alan Joyce. Although the stock has pared its year-to-date losses over recent weeks during the market-wide rally, at one stage the airline’s market cap had fallen by over $2 billion. 

Further signs of community bullishness were evident across each of the top 20 most traded stocks, where buying volume represented the majority of all trades. By value, most of the popular stocks also saw money flow skew towards buying activity. Beyond the top 20, just seven names out of the top 50 most actively traded stocks recorded a buy-to-sell ratio below 50%. 

Top 20 by Value

1. BHP (ASX: BHP) - 49.4% Buy-to-Sell Ratio - Share Price Performance 2023: 8.3%

2. Pilbara Minerals (ASX: PLS) - 50.2% Buy-to-Sell Ratio - Share Price Performance 2023: 4.5%

3. Bank of America (NYSE: BAC) - 50.0% Buy-to-Sell Ratio - Share Price Performance 2023: 1.5%

4. Fortescue Metals Group (ASX: FMG) - 47.2% Buy-to-Sell Ratio - Share Price Performance 2023: 35.8%

5. Citibank (NYSE: C) - 50.0% Buy-to-Sell Ratio - Share Price Performance 2023: 10.2%

6. Westpac (ASX: WBC) - 51.2% Buy-to-Sell Ratio - Share Price Performance 2023: -3.7%

7. Commonwealth Bank (ASX: CBA) - 49.6% Buy-to-Sell Ratio - Share Price Performance 2023: 7.3%

8. Macquarie Group (ASX: MQG) - 50.1% Buy-to-Sell Ratio - Share Price Performance 2023: 7.5%

9. ANZ (ASX: ANZ) - 51.9% Buy-to-Sell Ratio - Share Price Performance 2023: 8.0%

10. CSL (ASX: CSL) - 52.6% Buy-to-Sell Ratio - Share Price Performance 2023: -3.1%

11. Apple (NASDAQ: AAPL) - 49.8% Buy-to-Sell Ratio - Share Price Performance 2023: 52.1%

12. Whitehaven Coal (ASX: WHC) - 51.8% Buy-to-Sell Ratio - Share Price Performance 2023: -23.7%

13. National Australia Bank (ASX: NAB) - 50.3% Buy-to-Sell Ratio - Share Price Performance 2023: 0.4%

14. Woodside Energy (ASX: WDS) - 52.4% Buy-to-Sell Ratio - Share Price Performance 2023: -13.7%

15. Rio Tinto (ASX: RIO) - 47.8% Buy-to-Sell Ratio - Share Price Performance 2023: 14.1%

16. Core Lithium (ASX: CXO) - 50.9% Buy-to-Sell Ratio - Share Price Performance 2023: -70.1%

17. Tesla (NASDAQ: TSLA) - 52.9% Buy-to-Sell Ratio - Share Price Performance 2023: 105.8%

18. South32 (ASX: S32) - 54.7% Buy-to-Sell Ratio - Share Price Performance 2023: -19.0%

19. Qantas (ASX: QAN) - 49.8% Buy-to-Sell Ratio - Share Price Performance 2023: -10.0%

20. Mineral Resources (ASX: MIN) - 51.9% Buy-to-Sell Ratio - Share Price Performance 2023: -13.5%