• Investors and share traders in Australia are looking to trade investment themes and market trends
  • ‘Cash linked to our trading platform is at record levels. There is a lot of cash on the sidelines’ CMC Markets
  • ASX Cannabis Stocks Guide: Everything you need to know


Australian investors are becoming more adventurous in their trading choices as they look to trade market thematics and trends such as buy now pay later, big tech, bio-pharma, gaming and renewable energy.

Outside of the well-known ASX trades of big banks, top resources companies and large retailers, Australian investors are looking for new trends on which they can capitalise.

An example of this is the buy now, pay later sector which has mushroomed overnight.

“Two new entrants into our top 10 traded ASX stocks, which used to be dominated by banks and miners, are Afterpay (ASX:APT) and Zip (ASX:Z1P),” said Andy Rogers, CMC Markets’ director of stockbroking.

Travel-related stocks like Flight Centre Travel Group (ASX:FLT), Webjet (ASX:WEB) and Qantas Airways (ASX:QAN) are also in demand on expectations they will recover as freedom of movement increases around Australia.


Top traded ASX stocks for Australian retail share traders on CMC Markets’ trading platform in November

Rank by holdings value Security
1 Flight Centre
2 Westpac
4 Webjet
5 Commonwealth Bank
6 Zip
7 Qantas
8 Afterpay
9 Telstra
10 Woodside
11 National Australia Bank
12 Fortescue Metals Group
13 BHP
14 CSL
15 Mesoblast
16 Kogan
17 A2 Milk
18 Treasury Wine Estates
19 Oil Search
20 AGL Energy
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Biotech and remote lifestyle, other market thematics sought by investors

Pharmaceutical and biotech companies such as Pfizer and Moderna that are involved in the race for a COVID-19 vaccine have also seen increased popularity among Australian investors.

CMC Markets recently launched a new product to enable Australian investors to take advantage of emerging themes and topical trends in which they are interested.

This is a basket of stocks grouped around a particular theme or thematic such as biosecurity, cannabis, driverless cars, gaming, big tech, renewable energy and social media.

Another example is online shopping which has taken off during the COVID-19 pandemic, and this is catered for by the Remote Lifestyle basket.

The Remote Lifestyle basket is 15 company shares connected to the growing lifestyle trend of home-based consumption.

This basket of stocks includes Amazon, Domino’s Pizza, Fedex, eBay, Spotify, Twitter, Uber and United Parcel Service.

Rogers said the basket of stocks saves investors time and money, as they can gain exposure to 10 or so stocks grouped around a relevant theme without having to purchase individual shares.

“There is a trend for people buying what they know and what they can relate to,” said Rogers.

In the micro-cap stocks sector, some cannabis stocks are starting to gain investor interest.

“We do see interest in smaller cap stocks,” he said.

Cryptocurrencies is one of the developing market thematics, but Rogers believes that investor interest will lag until a viable futures contract is available to Australian investors.

Large amount of cash waiting on stock markets’ sidelines

In terms of the trading outlook for 2021, Rogers said he expects to see continued rising interest in share trading from younger Australian investors.

Two groups in particular — the so-called Millennial age bracket, and first-time investors — are leading the foray into share trading.

“Record numbers of clients are logging on to our trading platform each day, and there is a high level of engagement with it,” he said.

“We will continue to see growth in the market, and clients are skewed toward growth stocks rather than income,” said Rogers.

Part of the reason for this rising interest in share trading is the low return on bank accounts.

“Our largest competitor is cash. However, with the low returns available on term deposits people are not going into these,” he said.

Australian investors are preferring to have their cash on hand, ready to invest in shares.

“Cash linked to our trading platform is at record levels. There is a lot of cash on the sidelines,” said Rogers.

Currently, the combined value of client shareholdings is around $50bn and there is billions of dollars more in cash held in CMC Markets’ trading accounts, he said.

Fuelling the demand for stocks is the zero brokerage fee on share trades on the CMC Markets’ platform, although there is a competitive charge for foreign exchange transaction costs for international share trades.


Top traded US stocks for Australian retail share traders on CMC Markets’ trading platform in November

Rank by holdings value Security
1 Tesla
2 Nio
3 Apple
4 Palantir Technologies
5 Xpeng
6 Pfizer
7 Alibaba
8 Amazon
9 Microsoft
10 Li Auto
11 Square
12 Moderna
13 Switchback Energy
14 Zoom Video
15 FuelCell Energy
16 Nvidia
17 Arrow Minerals
18 Workhorse Group
19 BioNTech
20 CIIG Merger
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FAANG + Tesla stocks still favourites for Aussie investors

Tesla, along with Apple, Microsoft and Google parent Alphabet – members of the so-called FAANG stocks listed on US exchanges – are among the most popular US stocks in Australian retail portfolios.

Data provided by CMC Markets, Australia’s second largest broker on the ASX, show Elon Musk’s Tesla held the top spot in November for most-traded US stock.

Tesla has richly rewarded its stockholders by advancing to a price of $US649 per share, after its share split in September, and its share price is up 654 per cent since early January.

Apple is up a more modest 60 per cent in 2020, and Microsoft has increased in value by 34 per cent to date this year.

The full list of top US stocks traded by Australian investors on CMC Markets’ platform has changed since September, the time of the last update.

Netflix, the on-demand film viewing platform is held in fewer Australian investor portfolios, and is outside the top 20 list of popular-traded US stocks.

The company supplies the ‘N’ in the FAANG acronym, the same applies to Facebook which provides the ‘F’.

CMC Markets is the second largest retail broker on the ASX, and international trading is a relatively small but steadily growing business next to its core market of ASX trading.

The trading platform now offers 26 stock exchanges in 15 countries providing retail and professional traders with access to 36,000 financial instruments, including 9,000 ETFs. CMC Markets is a CHESS sponsored provider with the ASX.