Individual investors have been snapping up stocks at the fastest pace on record as U.S. equity markets have charged higher to start the year.
Over the past month, retail investors funneled an average of $1.51 billion each day into U.S. stocks, the highest amount ever recorded, according to data from research firm VandaTrack published Thursday.
"With recent surveys showing the institutional investor community remaining broadly bearish on stocks, it would be unwise to underestimate the importance of the retail cohort," strategists at VandaTrack said in a note. "That's in keeping with retail sales and jobs data for January, suggesting that consumers retain impressive levels of buying power."
Tesla (TSLA) remained the favorite among this group, with retail inflows to the stock totaling $9.7 billion year to date.
Those allocations come during a comeback rally for the electric vehicle giant after closing out its worst year on record in 2022. Tesla shares have gained 74% in 2023 through Wednesday's close.
The SPDR S&P 500 ETF Trust (SPY), an ETF which tracks the benchmark S&P 500, has been the second-most popular purchase by retail investors this year, with retail flows totaling $3.6 billion in 2023. The index is up 8.2% year to date through Wednesday.
Amazon (AMZN), Apple (AAPL), and Nvidia (NVDA) rounded out the top five, receiving $1.8 billion, $1.7 billion, and $1.4 billion in inflows this year, respectively. These names were up 20%, 19.5%, and 55.8% this year in that order.
More speculative, beaten-down names have also been popular buys, with investors again circling baskets of stocks favored by ARK Invest's Cathie Wood.
Wood's flagship ARK Innovation (ARKK) ETF, a bellwether for high-flying technology stocks, has seen a modest uptick in inflows this year, but stood 27th on a list of the biggest purchases from retail investors ponying up $169 million for the fund.
Retail investors did, however, snag key underlying names from ARK's family of exchange-traded funds — Coinbase (COIN), Block (SQ), Roku (ROKU), for example — faster than the firm itself, a phenomenon seen early into the COVID pandemic.
"It was common back in 2020-2021 for retail investors to buy ARK ETFs while at the same time piling in some of their more hyped underlyings," the team at VandaTrack said. "While we don't expect retail speculation to reach those levels, it is noteworthy that retail investors are vastly outpacing Cathie Wood and Co. regarding purchases across some of these names."
ARK Innovation was up 38.3% to date through Wednesday.
"Soaring retail investor flows underpin the outperformance of their favorite stocks," VandaTrack researchers said, adding retail flows have accounted for an $18.5 billion capital injection in these names in 2023.
"Should positive momentum in the broad equity market persist, it could push retail investors toward more speculative names, which are more susceptible to such flows given their smaller market cap."
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc