Retail investors outplayed fund managers over tariffs: Robinhood CEO

CNBC

19 hours ago

Retail investors, once dismissed as speculators, are now outmaneuvering professional fund managers by adhering to a simple strategy: buy into companies you believe in for the long haul, according to Robinhood's CEO. Institutional investors have spent the weeks since April 2's so-called "Liberation Day" worrying over macroeconomic signals and taking "risk off across the board," Vladimir Tenev told CNBC's "Squawk Box Europe" Tuesday. The S & P 500 fell sharply in the aftermath of the tariff announcements as institutional investors fled to perceived safe havens. The index has now not only surpassed its pre-tariff high of 5670, however , but has also rallied by 25% to 6237 since its bottom on April 8. Retail investors bought the dip — and won, Tenev said. Data from VandaTrack shows retail investors piled $85 billion into U.S. equities and ETFs between April 1 and July 7 — the highest on record, compared to the same period every year since 2021. Tenev contrasted this with institutional players who "think about stocks indirectly," often selling off assets based on macroeconomic factors like tariff news or perceived headwinds from a lack of tax cuts. Contrastingly, "what you're seeing is retail investors are investing in these companies because they believe in them," Tenev said, calling it a "back to the basics" approach. He added that investors on Robinhood's brokerage platform were particularly focused on stocks such as AI darling Nvidia , alongside Tesla and Amazon , for instance. "So when they see a massive macro-driven dislocation, they tend to look at that as a buying opportunity, because it doesn't affect the market positioning of these individual stocks on an idiosyncratic basis," he added. This conviction-led strategy is a significant divergence from the behavior of retail investors in the past, which is "healthy for the markets," Tenev said. .SPX YTD mountain