Tom Eckett, editor at ETF Stream, examines the dramatic increase in retail investor activity over the past 12 months, their behaviours and the impact they are having on financial markets

The rise of retail investors – or the Robinhood effect – has been the biggest transformation in financial markets since the coronavirus pandemic sent shockwaves through the global economy in March 2020 with market access becoming increasingly democratised and social media providing a voice for this army of traders to connect through the internet.

There is no doubt the potential impact of retail investors is on the rise. According to data from Bloomberg Intelligence, retail investor trading volumes on US equities jumped above 20% in 2021, far ahead of hedge funds and mutual funds which accounted for 10% and 6%, respectively.

A further signal to the growing role…

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