- Investor favour appears to have hit new heights in 2021, as the broker data begins to be published showing extraordinary trade volumes and customer signups.
- Commission-free US broker Stake tripled the number of traders on its platform in just eight months, hitting 300,000 in February.
- Meanwhile SelfWealth has reported “the most substantial period of customer growth in the company’s history”.
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A 50%-odd rally in sharemarkets in 2020 has sent retail investors running headlong into the market and fuelling growth of investment services.
On Monday, commission-free US broker Stake revealed it has amassed 300,000 users, tripling members on the platform since June on the back of market euphoria.
“The scale of investment and activity we’ve seen on Stake has been phenomenal. We feel like 2021 is going to be a big year for Australian investors,” founder Matt Leibowitz said.
To put that in perspective, it took Stake almost three years to sign up its first 100,000 members. It took just eight months to sign up 200,000 more.
That burgeoning customer base has traded more than $1.54 billion in the last nine weeks, as US markets climbed higher. Growth was accelerated further as the GameStop saga sent investors, both in Australia and abroad, into a frenzy in late January.
However, Stake has always maintained that the vast majority of its investors are experienced, and drawn a distinction between Australians and Robinhood investors with a reputation for risk.
“With over 75% of Stake’s customers having share-trading experience prior to joining Stake, it’s clear there’s a new wave of ASX investors wanting to be part of the opportunities only the US market can provide them; and that’s why Stake exists,” Leibowitz said.
Follow the crowd
Wall Street has led global indices on a rapid race higher since dropping in March 2020. The associated investor boom eclipses anything seen in decades in Australia.
“The pandemic, combined with the emergence of applications and services making trading increasingly accessible, has triggered a wave of new entrants in the markets from around the world,” Glenn Leese, director of growth for market platform TradingView, said.
“This is a fantastic trend, and Australia is no exception, with almost one in four investors in Australia who started to trade within the last two years.”
Stake, which exclusively enables US trading, is hardly alone in profiting off investors’ feverish appetite.
Publicly-traded SelfWealth, the discount Australian broker, announced on Friday that it too has welcomed many a new face.
In a statement to the ASX, SelfWealth recognised “the most substantial period of customer growth in the company’s history”, with customer holdings growing by $700 million this year alone to hit $5 billion
“Interest in the US share market from Australian retail investors is at an all-time high. By providing simple access to this market at a reasonable price, we have seen unprecedented interest from new clients to join the SelfWealth trading platform,” managing director Rob Edgley said.
Users are forecast to make 180,000 trades in February, or roughly four times as many as this time last year. It’s customer base is growing at a clip of 850 per day, or more than three times the rate in December. GameStop undoubtedly has something to do with that, with SelfWealth attributing its best ever day of 2,211 signups to “the peak of the GameStop trading frenzy”.
Even CommSec, the dominant retail investment platform in Australia, brought in another 230,000 new users in the six months to December.
If the January and February frenzy continues, it may well do that again by the end of the financial year.