Retail investors enjoyed another banner year by sticking to tried-and-true large-cap tech names that posted big gains and promised breakthroughs in artificial intelligence.
Vanda Research estimated that the year will end with around $265 billion in net new inflows into US markets by self-directed retail investors. While that’s $25 billion less than the average of the previous three years, according to data from Vanda Research, it’s still within the post-COVID-19 range, indicating a healthy appetite on the part of the average investor to get involved with the markets.
The six corporate tickers with the most inflows from retail investors 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 $67.7 billion in total retail inflows this year. Nvidia overtook Tesla as the most popular stock among retail investors, at least judging by the inflows.
Nvidia has earned $29.8 billion in retail net inflows this year, according to Vanda Research findings, up from $11.4 billion last year. Tesla’s retail receipts fell to $14.7 billion from $48 billion in 2023.
However, Tesla still surpassed Nvidia as the top holding in retail investors’ portfolios, representing an average portfolio weight of 10.58% compared to Nvidia’s 10.33%.
The other top four tickers were more leveraged index-based trades in popular themes like 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 Vanda Research Senior Vice President Marco Iachini. “For the average retail investor, it was another great year of portfolio performance. Loyalty to tech names paid off.”
Indeed, that loyalty to technology paid off.
Vanda Research estimates that the average retail portfolio increased 40.74% this year, the second-highest performance since 2014. Only 2023’s 41.94% performance was better in this 10-year span.
On a flow-adjusted basis, Vanda Research noted that this would be the second time retail investors have outperformed the S&P 500 (^GSPC) in consecutive calendar years and the first time since 2014 that the non-institutional sector has outperformed the Nasdaq Composite (^IXIC ).
No one knows whether the good times for retail investors will continue in 2025.
On the positive side, the incoming Trump administration has promised business-friendly policies, such as cutting government spending through the Elon Musk-led Department of Government Efficiency (DOGE) and expanding tax cuts.
