Retail Investors Pump $1.55T into Stocks, ETFs in 2025 H1, Driving 44.5% Trading Volume Surge

In the first half of 2025, retail investors injected a record-breaking 1553 billion dollars into individual stocks and ETFs, marking the highest level ever recorded for this period. This surge in activity was particularly pronounced in the second quarter, indicating an unprecedented level of market participation. Retail investors maintained their preference for buying on dips, with a continued increase in participation in individual stocks, particularly high-beta and leveraged products.

Among individual stocks, Nvidia, Tesla, and Palantir Technologies led the way in terms of fund inflows for 2025. Nvidia remained the top choice among retail investors, while Tesla reclaimed the second position, and Palantir saw a significant rise, moving up to the fourth spot. The influx of retail funds reached a new high, with individual stocks driving the rebound. While ETF purchases have seen steady growth over the past three years, they have not yet returned to the levels seen in the first half of 2022. In contrast, individual stock purchases in the first half of 2025 reached levels last seen during the bull markets of the first half of 2021 and 2023.

This increased participation is not only reflected in the volume of funds but also in the daily trading volume, which grew by 44.5% in 2025 compared to 2024, setting a new record for retail participation. Retail investors' tendency to buy on dips remained strong in 2025. Analysis by Vanda Research showed that while not as aggressive as in 2021, the retail buy-the-dip trend in 2025 was still significant. Specifically, for every 1% drop in the S&P 500, retail net inflows amounted to 1 billion dollars, down from 1.87 billion dollars in 2021 but still indicating a strong buying trend.

This phenomenon can be partly attributed to the lack of significant market corrections in the first half of the year. Although there were brief periods of decline, they lasted only 3-4 days, with stocks generally trending upward. When the U.S. stock market returned to its February highs last week, retail activity further intensified, with a net purchase of 84 billion dollars in cash stocks. On June 30, demand surged, with net purchases exceeding 30 billion dollars, the highest level seen in over a month.

Retail investors showed a strong preference for high-risk assets, with Nvidia continuing to top the list of favorite stocks, followed by Tesla and Palantir, which saw a 58 billion dollar increase in purchases, moving up to the fourth position. Ford Motor Company also re-entered the top 20, likely driven by automotive tariffs. In the past month, retail trading activity in volatile small-cap high-beta stocks, particularly those related to cryptocurrencies and regional banks, has become more active. In the ETF space, retail investors renewed their interest in technology stocks, with significant inflows into the Nasdaq ETF (QQQ) and the largest technology stock ETF (XLK). Options trading activity remained high, with retail investors selling 20 billion dollars in delta and a record 460 billion dollars in gamma this week.

In terms of leveraged ETF preferences, retail investors are shifting from broad-based products to single-stock products. Although broad-based leveraged ETFs still lead in total retail purchases, the overall flow into single-stock products continues to grow rapidly. Notably, the 2x leveraged Tesla ETF (TSLL) made its debut in the top 20, becoming the first single-stock leveraged ETF to enter the list. Despite a preference for high-risk assets, retail investment portfolios performed in line with the broader market. Vanda Research data showed that in the first half of 2025, retail investment portfolios returned in line with the S&P 500 index, trailing the Nasdaq index by only about 2%.

Looking at cumulative performance since 2024, retail investment portfolios have returned 40%, significantly outperforming the QQQ's 34% and the S&P 500 ETF (SPY)'s 32%, and even surpassing the average performance of hedge funds.