Retail inflows near record high despite market turbulence

May 25 (Reuters) – Individual investors are buying stocks at a pace similar to the meme stock frenzy of 2021, even as retail investment returns are at multi-year lows amid widespread sell-off amid concerns over rising interest rates, Vanda Research said.

Retail investors bought stocks worth $76 billion during a three-month period ended May 24, or $1.3 billion per day on average, compared with net purchases of $80.6 billion, or $1.32 billion per day , between January and March 2021, Vanda data shows.

The investors rose to fame last year when they banded together on online forums to make profits in GameStop (GME.N) and AMC Entertainment (AMC.N) and others that cost hedge funds billions of dollars.

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Shares of retail darlings, however, have since plummeted. GameStop has lost about half of its value in the past year and AMC a quarter, compared to the S&P 500 (.SPX) 6% decline.

The performance of the retail investor portfolio relative to broader markets over the past three months was the worst ever by Vanda, which has data as of early 2014.

That hasn’t stopped small investors from buying shares of their favorite tech and growth companies like Apple (AAPL.O), Tesla (TSLA.O) and Amazon.com (AMZN.O) in the past week, according to Vanda. as the benchmark S&P 500 came within range of confirming bear market territory.

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Reporting by Medha Singh in Bengaluru; Editing by Shinjini Ganguli

Our Standards: The Thomson Reuters Trust Principles.

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