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Retail Investor Trends: Revisiting the impact of retail activity
01 March 2021
Just when you thought you were done explaining how the stock
market works to all of your friends, GameStop and AMC shares start
rallying again as the Reddit message boards move back into the
spotlight. At this point, everyone should just assume retail
investors are controlling the market and the whims of Robinhood
traders drive your stock price, right? There's no question
understanding what component of your capital flows and current
ownership stem from retail investors is important for any IR
program, but our team analyzed our available
capital flows since late 2019 to identify just how much of an
impact this group has had on trading volume. The key takeaways -
retail investors have remained a surprisingly consistent % of
market volume over this time, despite recent headlines, though
their impact on volume is considerably larger for small cap
companies compared to large and mid caps. While volumes have not
necessarily been elevated over this time, the group has had a bias
towards buying vs. selling, leading to an overall increase in total
ownership across our sample set of $17T in equities. So while
awareness of your retail ownership is important, particularly for
smaller companies, institutional and hedge fund investors as a
whole remain the primary drivers of stock prices and larger IR
priorities overall.
Brian Manalastas Senior Associate, Research and Analysis
Richard Harrisberg Associate, Research and Analysis
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
