Retail stock portfolios outperform institutional investors by 16 percentage points in May, setting a record

The Kobeissi Letter published on X platform stating that in May, the most favored stock portfolio of retail investors outperformed the most favored stock portfolio of mutual funds by 16 percentage points, the largest monthly gap since data was available in 2018. Retail investors prefer a stock portfolio that includes large tech stocks, such as Magnificent 7 and semiconductor stocks. In April, individual investors achieved an excess return of 14 percentage points, creating the largest gap in history for the two months, surpassing the record of 13 percentage points set at the beginning of the meme stock boom at the end of 2020. In the same month, the total amount of funds used by retail investors for semiconductor option contracts reached 4.9 times the historical monthly average level, setting a new historical high and about 25% higher than the record before March 2024.