Key takeaways: 

• More than one-in-four Selfwealth trades during FY 23/24 involved ETFs. 

• Iron ore and lithium miners were at the centre of significant interest in Materials shares, while the rally in bank shares supported trading activity across the Financials sector. 

• The Information Technology sector drew the most interest in offshore stocks, with 43.6% of all tech trades involving US-listed shares. 

• Other investing thematics that appealed to Selfwealth members included pharmaceuticals, biotechnology and life sciences, electric vehicles, coal, and uranium. 

During the financial year, Selfwealth members focused their attention on a wide range of shares across an assortment of industries, from metals and mining, to banks, financial services, software and services, hardware and equipment, pharmaceuticals, and much more. 

These industries and investing themes circle back to market sectors, with the most popular among the Selfwealth community being Materials, Financials, and Information Technology. At the same time, however, ETFs continue to appeal to a large audience of investors. 

We’re analysing the trading activity across the various market sectors in FY 23/24. While not an official sector per se, we’re including ETFs as a separate ‘sector’ to track investment behaviour, albeit said ETFs span across various market sectors, industries, and thematics. 

Exchange-Traded Funds (ETFs) 

By volume, ETFs were the most popular trade across the Selfwealth platform in FY 23/24, making up 26.0% of all trades.  

This category also commanded the highest buying conviction, and by some margin, with the buy-to-sell ratio being exceptionally high at 69.6%. With nearly seven out of every ten ETF trades being ‘buys’, this result is indicative of long-term interest in ETFs, whereas traditional market sectors were more susceptible to short-term trading activity. 

Just two US-listed ETFs featured among the top 20 ETFs traded, being Direxion Daily Semiconductor Bull 3X Shares (NYSE: SOXL) and Direxion Daily Semiconductor Bear 3X Shares (NYSE: SOXS), however, various ASX-listed ETFs offered exposure to international indices such as the S&P 500 and Nasdaq 100. 

Materials and Financials  

The two largest sectors of the ASX by market capitalisation are Financials and Materials, and it was also these two sectors that drew the greatest volume of trading activity from Selfwealth members last financial year. 

Materials shares accounted for 25.1% of all Selfwealth trades in FY24, only slightly behind the total volume of trades relating to ETFs. On the other hand, just over one in ten, or 10.5% of all Selfwealth trades during the period involved Financials. 

Trading interest in Materials shares was largely associated with iron ore and lithium mining entities. The former includes the likes of BHP (ASX: BHP), Fortescue (ASX: FMG), and Rio Tinto (ASX: RIO), each trading on high dividend yields, while the latter, including Pilbara Minerals (ASX: PLS), Core Lithium (ASX: CXO), and Liontown Resources (ASX: LTR), among others, garnered publicity on account of the role lithium is expected to play as part of a long-term transition to renewables.  

Commodity price volatility also played a role in driving trading activity, with lithium prices at one stage circling multi-year lows, and iron ore prices at an 11-month low during the financial year. 

Financials performed exceptionally well in FY24, largely on the back of a broad rally in bank shares like Commonwealth Bank (ASX: CBA), Bank of America (NYSE: BAC), and several others. Buying conviction within the sector, as measured by the buy-to-sell ratio of 53.5%, trailed most other sectors, likely on account of profit taking following the sector’s strong gains. 

Information Technology, Health Care, and Consumer Discretionary 

The tech sector represented 8.1% of all Selfwealth trades across the financial year, with themes like semiconductors, generative artificial intelligence (AI), cloud computing, hardware and equipment, bitcoin, as well as digital advertising among the most popular areas of exposure. 

Compared with other sectors, US shares contributed to a much higher percentage of overall trading activity for this sector, with 43.6% of all tech trades involving US-listed shares. Some examples of these names were Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Advanced Micro Devices (NASDAQ: AMD), and Meta Platforms (NASDAQ: META). 

By way of comparison, the sector with the second largest representation of US share trades was the Consumer Discretionary sector, where Tesla (NASDAQ: TSLA) predominantly accounted for almost one-in-three sector trades involving US shares. 

Wedged between the Information Technology and Consumer Discretionary sectors, Health Care shares made up 6.9% of all Selfwealth trades in FY 23/24. The sector drew the highest buying conviction of any traditional sector, with a buy-to-sell ratio of 58.6%.  

Health Care trading activity was associated with a clear interest in the pharmaceuticals, biotechnology, and life sciences industry, with six of the top seven most traded shares from this sector related to this space. All six of these shares were ASX-listed, being CSL (ASX: CSL), Mesoblast (ASX: MSB), Neuren Pharmaceuticals (ASX: NEU), Imugene (ASX: IMU), Dimerix (ASX: DXB), and Telix Pharmaceuticals (ASX: TLX). 

Energy and Other Sectors 

Overall, Energy shares represented 6.1% of all Selfwealth trades throughout the period. Aside from Woodside Energy (ASX: WDS), which was the most actively traded share in the sector, Selfwealth members showed strong interest in two key themes in relation to this sector - coal and uranium. 

Within this sector, the top 10 most actively traded shares featured three coal exporters in Whitehaven Coal (ASX: WHC), Yancoal (ASX: YAL), and New Hope (ASX: NHC), while there were also four uranium shares courtesy of Boss Energy (ASX: BOE), Paladin Energy (ASX: PDN), Deep Yellow (ASX: DYL), and Peninsula Energy (ASX: PEN).  

During the year, uranium prices recorded a near 17-year high, while three of the above uranium shares significantly outperformed the S&P/ASX 200. It was a volatile year for coal prices; however, elevated trading interest may have been linked with an expected increase in global coal demand courtesy of China and India, and several shares from the segment trading on high dividend yields. 

Elsewhere, there was modest trading interest across other sectors, with the combined trade volumes in Industrials, Consumer Staples, Communication Services, Real Estate, and Utilities shares representing just 11.0% of all Selfwealth trades for the 12 months ending June 30, 2024.