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Sharesies Investors More Active Than Usual During The Holiday Season

Despite ongoing cost-of-living challenges and added financial stressors during the holiday season, investors with New Zealand wealth app Sharesies bucked trends observed in previous Christmas periods with an uptick in investing.

Sharesies’ Q3 Index (Oct-Dec 2023) shows retail investor sentiment hovering between cautious and concerned levels, tracking lower from cautious (35 points) to concerned (27 points) halfway through the quarter and back up to cautious (30 points) to end the calendar year.

Sharesies co-founder, director and 3EO Brooke Roberts says the relatively stable numbers are in contrast with the Q3 Index results for the previous two years, which showed a dip in confidence levels during the holiday season.

“November and December usually sees retail investors’ activity drop as it’s a time of year when people feel less well-off and have extra holiday expenses to cover,” she says.

“In contrast to previous years, Sharesies saw the highest December trading volumes in its six-year history. Investors were likely buoyed by November’s rally in US markets, driven by the US Federal Reserve signalling rate cuts are on the cards for 2024.”

The Net Buy/Sell Ratio for the quarter averaged 1.39, up on 1.15 and 1.07 from the previous two quarters. The quarter ended at 1.24. These results indicate investors are generally buying more than they’re selling. US markets’ performance significantly impacted this data point, with approximately 70 per cent of executed trades and 31 per cent of portfolio holdings in the US.

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“We saw a trend this quarter towards selling in high-profile stocks like NVIDIA, Apple Inc, Meta Platform Inc and Palantir Technologies, as some investors took the gains resulting from the market rebound,” Roberts says.

“But this was outpaced by strong buying behaviour, which held the Net Buy/Sell Ratio at a robust level for the quarter.”

The Net Deposit Ratio strengthened in Q3. For every $1 withdrawn, more than $2 was deposited, which signals investors are sticking to their long-term plans, despite the financial pressure the holiday season can put on households.

Sharesies’ investors favoured holding the likes of Air New Zealand Limited, Tesla Inc, Apple Inc, Auckland International Airport Limited and Mainfreight Ltd. Popular fund choices were Smartshares US 500 ETF, Pathfinder Global Responsibility Fund, Smartshares NZ Top 50 ETF, Vanguard 500 Index Fund and Pathfinder Global Water Fund.

The quarter’s biggest changes included Tourism Holdings climbing 12 places to rank 46th in the Sharesies Bundle, after the company’s return to profitability and resumption of dividends, and Smartpay Holding Ltd falling five places. Smartpay’s strong earnings growth in 2023 saw some investors who bought in at a lower price realise their gains.

Sharesies has New Zealand’s largest retailer investor base, with about 620,000 users across New Zealand and Australia.

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