Contrary to the notion that retail investors may have lost some of their joie de vivre after fueling all manner of speculative manias during the pandemic risk asset bonanza, new research from Goldman suggests retail buying has picked up.
On the bank’s estimates, retail investors bought a net $7 billion of Russell 3000 shares since volatility spiked late last month, with the lion’s share going to big-caps.
Goldman’s analysts availed themselves of datasets developed by the bank’s electronic trading team. As you might imagine, retail is still keen on tech. In fact, day-traders and homegamers bought more tech than any other sector over the past two weeks. Over a longer horizon, it’s not even close. Since 2019, net retail inflows to tech stand at around $40 billion. The next closest sector in Goldman’s data is Consumer Discretionary, at ~$15 billion.
“Recent weakness in stocks that have been associated with retail investor activity (high growth stocks, IPOs and popular hedge fund shorts) has led some to believe that retail investor buying activity has waned significantly,” the bank’s John Marshall said. “However, data on aggregate net buying activity from our analysis suggests that retail buying has accelerated.”
So, if you’re looking to explain weakness across so-called “hyper-growth,” profitless tech and sundry pandemic winners (some of which have now erased the entirety of their COVID, stay-at-home gains), perhaps think twice before echoing the “blame retail” excuse.
If you’re wondering what retail investors bought over the past three months, you won’t be surprised to learn that Nvidia, Amazon, Tesla and Microsoft all landed at the top of the list (table on the left, below).
Alibaba, Apple and Moderna all saw at least $600 million of retail outflows over the same period. BABA for obvious reasons and Moderna likely because market participants are concerned about the company’s portfolio at a time when COVID may be “downgraded” from pandemic to endemic.
For what it’s worth, the latest EPFR data showed global equity funds took in just $2.2 billion over the latest weekly reporting period, by far the slowest week of 2022.
Treasurys, meanwhile, saw the largest weekly inflow since the onset of the pandemic.
