This review of our subscribers’ top trades from Sharesight covers the month of July. Sharesight is a portfolio tracker that is integrated into Morningstar Investor. Their data shows the top 20 trades by Morningstar subscribers. Sharesight’s data below ranks total trading activity which is split between sells (orange) and buys (yellow).

Sharesight Top Trades in July

The ETF takeover

A clear pattern continues to emerge in our monthly data as ETFs are growing in popularity over direct shares. ETFs now make up 8 of the top 10 most traded securities and contribute 13 names total. Since my first monthly edition in February, there has been a 45% increase in ETF names on the most traded list. Moreover, the top 10 has seen a 60% increase in the same period.

This month, Vanguard Australian Shares ETF (ASX.VAS) gave up the top spot to Vanguard MSCI International Shares ETF (ASX.VGS). The top three ETFs have retained their popularity through the year, while newer ETF names have slowly crept in. The key themes across these ETFs are tilted towards international growth and high yield products. The growing number of specialised ETF products on the list suggests some investors may be increasingly using ETFs to target specific investment themes rather than merely broad-market exposure.

The Betashares Wealthbuilder Geared ETF (ASX.GHHF) has gained ground on the list month on month. This is an example of a product that uses borrowed funds to invest in a range of ETFs with exposure to Aussie and international share markets (between 30-40% geared).

While gearing can be attractive when looking to maximise returns, investors should be aware of the magnified downside risk. Diversification benefits from ETFs can also diminish during periods of market stress, as correlations between underlying assets tend to rise. In these environments, gearing can act as an accelerant, amplifying losses just as it amplifies gains in rising markets.

Looking at direct equities, WiseTech continues to hold the top position, followed closely by CSL and BHP. There have been no changes to direct equity names since May. As we enter August earnings season, there is potential for a shake up to our current equity rankings.

Now let’s dive into the three biggest investment trends from July and test the narratives against our analysts’ views.

WiseTech (ASX.WTC)

  • Fair Value Estimate: $130 (70% discount at 06 August)
  • Rating: ★★★★★
  • Moat: Wide

It has been over six months since we last covered WiseTech in this series. Since then, the shares have remained in the top 10 most traded every month. The shares have come off 60% in the past year, while our fair value has remained relatively stable. Governance concerns involving founder Richard White have hindered investor sentiment at a time when the broader ASX tech sector has struggled.

The shares continue to screen as materially undervalued. In fact, WiseTech remains one of the few ASX companies in our coverage with a 5 star and Wide Moat rating. Such combinations are typically rare and may be a reason why it remains of interest for subscribers. WiseTech’s long-term strategy centers on becoming the operating system for global trade and logistics as the industry digitises over the next decade. The logistics industry currently operates with a relatively low level of digitisation.

The core product suite, CargoWise, provides the best-in-class software solution for international freight-forwarding by air, ocean, customs and compliance. We see logistics companies that use the CargoWise international freight-forwarding solution significantly outperforming their peers due to the efficiency and productivity improvements the platform provides. We therefore expect this solution to become the industry default, either through increased customer adoption or through WiseTech’s customers taking market share.

CSL (ASX.CSL)

  • Fair Value Estimate: $165 (20% discount at 06 August)
  • Rating: ★★★★
  • Moat: Narrow

Like WiseTech, CSL has remained in the top traded shares over the past six months. The share price too has suffered, down 50% over the past year. CSL has delivered a myriad of disappointing earnings updates recently which has wounded investor confidence. Our data suggests investors may now be seeing the discount to fair value as attractive.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated, as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

Shares are undervalued as we are more optimistic than the market on plasma demand and margins. We forecast immunoglobulin revenue to grow at a 10-year compound annual growth rate of 5% based on flat pricing but higher volumes from population growth, rising diagnosis rates, longer duration on therapy, less mature markets and expanding use in immunodeficiencies.

The next milestone investors should look for is a meaningful reduction in blood plasma collection costs. This may include some rationalization of capacity. CSL is also refocusing on lifecycle management of products and novel modalities to revitalise revenue growth.

Vanguard Diversified High Growth Index ETF (ASX.VDHG)

Rating: Silver

The Vanguard Diversified High Growth ETF has slowly gained traction in our top 20 list over the past six months. This ETF offers investors a cost-effective way to access a 90/10 mix of growth and defensive assets.

The performance of this ETF is consistent with expectations for a passive, diversified strategy. The fund has tracked its benchmark closely over time, the Vanguard High Growth Index. During periods of market stress, the portfolio’s diversification has had mixed results, but recoveries have been strong, though investors should expect results in line with the broader market. The fund’s low fee structure remains a key advantage, supporting higher net returns for investors over the long term.

Our manager research team notes this ETF is a solid option for investors seeking a reliable, transparent and low-cost core holding. While it is unlikely to deliver significant outperformance, its disciplined approach, experienced team and focus on investor outcomes make it a dependable choice for high-growth portfolio exposure.

The Total Cost Ratio is 0.27% per year, placing it in the cheapest quintile of the Morningstar Australia Fund Multisector Aggressive Category, where the median fee is 1% per year.

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