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These are the most popular stocks among Australian millennials in 2022

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With the Nasdaq deep in a bear market and inflation soaring, investors are ditching their once-favourite tech stocks for new sectors.

For the last couple of years, technology stocks have been the market staples of the next generation of investors.

Stake co-founder and CEO Matt Leibowitz said data now shows traders are moving out of technology stocks and into mining and lithium-related equities as well as exchange-traded funds (ETFs).

Stake is an Australian ASX and US stock trading platform especially popular with millennials, with the average customer aged 32.5 years.

Stake CEO and co-founder Matt Leibowitz

Stake CEO and co-founder Matt Leibowitz. | Image: Supplied

"Those investing on the ASX through Stake have moved away from individual tech stocks as interest rates bite," Leibowitz told Finder.

"Lithium-related miners make up 60% of the top 10 Australian securities this year, including BHP, Lake Resources, Core Lithium, Pilbara Minerals, Fortescue and Novonix," he added.

Meanwhile, tech stocks such as Zip and Sezzle which were hugely popular during the pandemic are no longer in the top 10.

"Vaccine providers including Pfizer, AstraZeneca and Moderna saw large inflows [in 2020], while tech rally beneficiaries such as Tesla, Apple, Microsoft, Zoom and Amazon attracted interest," explained Leibowitz.

"Fast forward to 2022 and the sentiment means investors on the US market are either dollar-cost averaging or actively looking to benefit from falling share prices and an appreciating dollar."

ETFs now more popular than stocks

The market downturn also seems to have bolstered the popularity of ETFs over the last 12 months.

The Vanguard Australian Shares Index ETF followed by the Betashares Nasdaq 100 ETF were the most purchased Australian equities on Stake's platform this year, beating any single stock.

"Over the past 12 months, Australian investors are opting for long-term dollar-cost averaging as market uncertainty prevails," said Leibowitz.

Dollar-cost averaging is where you invest smaller amounts regularly into the market, often via ETFs or other managed portfolios.

Data from Australian portfolio tracker Sharesight, which tracks trades across multiple share trading platforms, similarly show the top 3 most purchased equities this year by Australians are all Vanguard ETFs: VAS, VGS and VDHG.

Table of top 20 ASX trades

Leibowitz said inverse ETFs, which deliver returns as the market falls, have also been a favourite this year among more advanced investors as they try to hedge portfolios or profit from the downturn.

Bear market strategies

The trends we're seeing generally reflect what's happening across the market.

With interest rates going up and a global recession looming, global stocks – especially growth stocks – have been on a downward trend for months.

The tech-heavy Nasdaq 100 is down over 30% since the start of the year while the S&P 500 is down around 20%.

At the same time, multi-decade-high inflation has seen some commodity and mining stocks performing strongly despite the correction.

An index of top ASX mining companies (S&P/ASX 300 Metals and Mining) is down just 6% compared to the market or +1.5% when taking into account dividends.

The data shows that retail investors are very well aware of these macro trends and are changing their tactics, either by focusing on long-term investments into ETFs or looking to profit from rising commodity prices.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances and obtain your own advice before making any trades.

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