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Retail investors enjoyed another banner year by sticking with tried-and-true large-cap tech names that raked in big profits and promised advances in artificial intelligence.
Vanda Research estimated the year will end with about $265 billion in net new inflows into US markets by self-directed retail investors. While that is $25 billion less than the previous three years’ average, based on Vanda Research’s data, it’s still within the post-COVID-19 range — indicating a healthy appetite for the average investor to be engaged with markets.
The six corporate tickers 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 pulled in $67.7 billion in total retail inflows this year. Nvidia overtook Tesla as the most popular stock among retail investors, at least judging by inflows.
Nvidia has pulled in $29.8 billion in retail net inflows this year, per Vanda Research’s findings, up from $11.4 billion last year. Tesla’s retail inflows dropped to $14.7 billion from $48 billion in 2023.
Tesla still edged out Nvidia as the top holding in retail investor portfolios, however — representing a 10.58% average portfolio weighting compared to 10.33% for Nvidia.
The other four top tickers were more index-based trades levered to 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 markets,” Vanda Research senior vice president Marco Iachini said. “For the average retail investor, it was another great year of portfolio performance. Loyalty to tech names paid off.”
Indeed that tech loyalty did pay off.
Vanda Research estimates that the average retail portfolio is up 40.74% this year, the second-highest performance since 2014. Only 2023’s 41.94% performance was better over this 10-year time span.
On a flow-adjusted basis, Vanda Research noted that this would mark the second time retail investors have beaten the S&P 500 (^GSPC) in back-to-back calendar years and the first time since 2014 that the non-institutional crowd beat the Nasdaq Composite (^IXIC).
Whether the feel-good times for retail investors will continue in 2025 is anyone’s guess.
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 extending tax cuts.
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