Retail investors enjoyed another banner year by sticking with proven big tech names that reaped big profits and promised advances in artificial intelligence.
Vanda research It is estimated that the year will end with net new inflows of approximately $265 billion into the US markets from self-directed retail investors. While that’s $25 billion less than the average over the past three years, based on Vanda Research data, it’s still within the post-COVID-19 range – suggesting the average investor has a healthy interest in to deal with markets.
The six company stickers with the most retail investor inflows were a who’s who of tech momentum trades: AMD (AMD), Nvidia (NVDA), Apple (AAPL), Palantir (PLTR), Tesla (TSLA) and Amazon (AMZN). These five names generated a total inflow of $67.7 billion this year. Nvidia has overtaken Tesla as the most popular stock among retail investors, at least judging by inflows.
Nvidia has brought in $29.8 billion in net retail inflows this year, compared to $11.4 billion last year, according to Vanda Research findings. Retail inflows into Tesla fell from $48 billion in 2023 to $14.7 billion.
However, Tesla still beat Nvidia to the top spot in retail investors’ portfolios, representing an average portfolio weight of 10.58%, compared to 10.33% for Nvidia.
The other four top tickers were more index-based trades deployed on popular themes such as AI: Direxion Daily Semiconductor Bull 3X Shares (SOXL), Invesco QQQ Trust (QQQ), ProShares UltraPro QQQ (TQQQ) and SPDR S&P 500 (SPY). .
“2024 was an eventful year for the markets,” said Marco Iachini, senior vice president of Vanda Research. “For the average retail investor, it was another great year in terms of portfolio performance. The loyalty to technology names has paid off.”
That technological loyalty has indeed paid off.
Vanda Research estimates that the average retail portfolio has increased 40.74% this year, the second highest performance since 2014. Only the 41.94% performance in 2023 was better over this ten-year period.
On a flow-adjusted basis, Vanda Research noted that this would be the second time retail investors have beaten the S&P 500 (^GSPC) in consecutive calendar years, and the first time since 2014 that the non-institutional crowd has won the competition. Nasdaq Composite (^IXIC).
It remains to be seen whether the feel-good times for private investors will continue in 2025.
On the plus side, the new Trump administration has promised business-friendly policies such as: cutting back on government spending through the Elon Musk-led Department of Government Efficiency (DOGE) and expanding tax cuts.