With the help of $0-brokerage platforms, plenty of Australian investors have been getting into US shares the past couple of years.
According to National Australia Bank Ltd. (ASX: NAB)'s popular online trading platform nabtrade, foreign businesses that are at the forefront of "decarbonisation and technology" are especially popular.
So much so that Australian investors now hold more Tesla Inc (NASDAQ: TSLA) shares than blue chip S&P/ASX 200 Index (ASX: XJO) stocks like Woolworths Group Ltd (ASX: WOW).
"To see an international stock, particularly a newer, more volatile company like Tesla, just outside the top 10 holdings on nabtrade is extraordinary," said nabtrade investor behaviour director Gemma Dale.
"The trend of buying direct international shares has been growing at a much higher rate than domestic shares for the last 5 years."
Perhaps as a collective indictment on the behaviour of Australian businesses, more nabtrade investors now own shares in the electric vehicle maker than ASX carbon emitters like Rio Tinto Limited (ASX: RIO) and Woodside Petroleum Limited (ASX: WPL).
Dale said overseas stocks are scratching an itch that can't be easily done with local shares.
"We are seeing a rise in interest in specific sectors that are not well represented on the ASX, such as solar energy, electric vehicles and green hydrogen."
Similar to Tesla, Saxo Markets this week revealed fellow electric car maker Rivian Automotive Inc (NASDAQ: RIVN) was the 4th most traded stock among Australians on its platform last month.
Rookie investors aren't necessarily speculators
According to nabtrade, the stereotype that younger, inexperienced investors have debuted in the market the past 18 months looking for a quick buck doesn't necessarily hold true.
"New investors still prefer to start their investing journey on the ASX, with ASX 200 ETFs in the top 10 buys, along with the big four banks, BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL)."
According to Dale, investors start looking elsewhere after they create a basket of "safe" local stocks.
"Once investors have established a domestic portfolio – either an ETF or a handful of stocks, they are starting to look offshore for growth."
Younger investors were also more likely to practise buy-and-hold. Nabtrade figures showed 80% of generation Y users holding their shares for more than 4 months, while just 70% did that among baby boomers.
Nabtrade has seen an incredible 200% growth in new accounts over this year. This rate peaked in 2020 at 500% from new investors "buying the dip" during the COVID-19 crash that year.
