10 most traded US stocks by Australians in 2020
Tesla and rival Nio top the list as the two favourite US stocks by Australian traders this year.
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In case you missed it, US stocks are going bananas this year. Since the market crashed in March, the S&P 500 has gained 55%, hitting five consecutive record highs last week and wiping all losses resulting from the pandemic.
Australian portfolios absent of US stocks may have just missed out on one of the best growth opportunities in decades.
Spearheaded by the arrival of new low-fee US trading apps in recent years, Wall Street stocks have become increasingly popular in Australia, especially among "next-gen" traders.
Global online broker eToro has seen its Australian customer base grow by more than 510% since the start of the year after launching commission-free US stock trading, as traders look to take advantage of the market volatility during COVID-19.
Top traded US stocks of 2020 by Australians
|1. Tesla (NASDAQ: TSLA)||6. Facebook (NASDAQ: FB)|
|2. NIO (NYSE: NIO)||7. AMD (NASDAQ: AMD)|
|3. Apple (NASDAQ: APPL)||8. Alphabet (NASDAQ: GOOGL)|
|4. Amazon (NASDAQ: AMZN)||9. Boeing (NASDAQ: BA)|
|5. Microsoft (NASDAQ: MSFT)||10. Nvidia (NASDAQ: NVDA)|
Jump down to the list of stocks
This new style of online broker is decidedly "millennial" focused rather than "boomer", with a customer base that's more aligned with Reddit's r/wallstreetbets than the Financial Review.
Scroll the discussion threads there and one stock quickly stands out. Depending on who you listen to, it's either about to land on the moon or is the single biggest bubble in history.
And according the latest data from eToro, the automaker is also the most traded US stock by Australian users, followed by its rival.
Tesla the stock of 2020?
Tesla (TSLA) not only keeps its hoard of fans happy with frequent showy company updates, Elon Musk makes a point of keeping in touch with traders, more often than not stirring the pot and driving share price volatility.
Back in May, Elon Musk sent company stocks falling 6% after suggesting its price was overvalued over Twitter. Meanwhile a crude three-letter message to the SEC in July wasn't enough to discourage a 10% rally in the four days following.
SEC, three letter acronym, middle word is Elon’s
— Elon Musk (@elonmusk) July 2, 2020
Tesla's stock has been rallying again in August, jumping an incredible 50% in the last month after it announced a 5-for-1 stock split at the end of August. While it doesn't increase the value of your shares, the price reduction makes the stock more affordable for the masses.
So it's little surprise that Tesla (TSLA), followed by up and comer Chinese rival Nio (NIO), are also the two most traded stocks this year by Australian users. In the last year alone, Tesla's share price has jumped 420% while electric vehicle startup NIO has seen similar gains of 434%.
Other household names, including Apple, Amazon, Microsoft and Facebook, also appear on the most traded list of both Australian and US users amid newfound enthusiasm for technology companies.
Below are a list of the 10 most traded stocks on eToro by Australian users in 2020 (as of 25 August), along with their recent stock price performance.
What has become more apparent this last year is the US has enormous stock growth opportunities. Wall Street doesn't just house some of the biggest and most well-known companies in the world, it has also outperformed our market by a significant margin in the last decade.
With many of us forced to work and socialise from home, technology stocks have dominated gains in 2020. The combined values of Apple, Amazon, Microsoft, Facebook and Google, now account for almost 25% of the biggest 500 US companies, compared to less than 20% pre-COVID-19.
If you’d invested $500 in the benchmark ASX 200 index just after the 2008 market crash, you’d have seen it grow to $860 as of May this year. On the other hand, if you’d invested in Wall Street’s NASDAQ index during the same time, it would have grown to over $1,500.
For more information on investing in Wall Street from Australia, check out our guide to buying US stocks.