Retail investors are storming into 2025, glued to their apps and throwing $7.8 billion into the market last week, says JPMorgan.
The buying spree had them snapping up semiconductor names like Nvidia, AMD and Micron, plus financial plays like SoFi Technologies, Goldman Sachs and Robinhood. And they’re also dumping last year’s darlings: Tesla and Apple.
The pros? They’re not buying the hype. In fact, institutions sold $10.5 billion during regular trading hours.
Goldman Sachs trader Scott Rubner notes this pretty apparent disconnect, saying it may cause FOMU — fear of materially underperforming — among the big players.
Read more: Trump’s speech didn’t move markets. This will…
Meme material
This wouldn’t be the first time hedge funds have trailed retail investors. Many underperformed the S&P 500 last year, fueling memes about how the “smartest” minds can’t even beat an index.
The fallout of that underperformance is now revealing itself and is not funny like the memes. Hedge funds are starting to cut jobs as they try to find their footing in 2025.
Bridgewater Associates reportedly just cut 7% of its staff (about 90 jobs) in January. Brevan Howard and Two Sigma are trimming headcount too, after underwhelming performances in 2024.
Meanwhile, retail investors were leaning into winners like Constellation Energy and Vistra, two power stocks leading the S&P 500 in January with gains of 55% and 40% — as we called it in December.
ETFs playbook
That said, this may be just the start for retail traders. Historical data going back a decade suggests that retail inflows usually peak in January and February. The pace of inflows could accelerate, according to Vanda.
If you’re looking to follow the retail crowd, check out $BUZZ, the VanEck Social Sentiment ETF.
The fund is designed to track the BUZZ NextGen AI US Sentiment Leaders index, which tracks the 75 large-cap US stocks getting the most bullish chatter online. It is up 5% this year, beating the S&P 500’s 4%.
Read more: ETFs, the cheat code that could crash the markets
Crypto funds are seeing renewed interest post Donald Trump’s inauguration as US president, while tech-based ETFs were net sellers. Here’s where the money moved last week:
In:
- Direxion Daily Semiconductor Bull 3X Shares ($SOXL)
- Financial Select Sector SPDR Fund ($XLF)
- Invesco NASDAQ 100 ETF ($QQQM)
Out:
- ProShares UltraShort QQQ ($QID)
- JPMorgan Ultra-Short Income ETF ($JPST)
- Vanguard Real Estate Index Fund ETF ($VNQ)
- Direxion Daily FTSE China Bull 3x Shares ($YINN)
- iShares TIPS Bond ETF ($TIP)
Retail traders are calling the shots — for now. Whether Wall Street catches up or keeps sitting out is the story to watch.
Edited by Ankush Chibber. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
