In a tense market environment, U.S. equity trackers and their global counterparts are in particularly high demand. Cryptos are also being bought again. Trading is proceeding along moderate lines.
27 September 2022. Frankfurt (Börse Frankfurt). Another weak week on the equity markets has not further weighed on sentiment in ETF trading.
However, price risks remain, Ralf Umlauf and Ulrich Wortberg of Helaba assess the situation. "There is no reason for optimism at the moment." They said German economic sentiment has weakened again and gas prices are still extremely high. Therefore, he said, the outlook for consumers and companies is clouded. Technical indicators are also signaling trouble.
Despite the unchanged situation, Frank Mohr of Société Générale registered a balanced picture in trading: "Buying and selling are currently in balance. The trading volume is perfectly in line with an average week."
Fabian Wörndl of Lang & Schwarz also reports selling and inflows in equal measure. "There is no panic - but rather a relative calmness. Investors have become more resistant."
U.S. indexes and global equity trackers dominant
Index funds with U.S. and global equities dominate Société Générale's day-to-day trading. "A good half of the trading relates to these two regions, 35 percent and 20 percent, respectively," Mohr reports. The buy side is particularly pronounced in the BNP Paribas Easy S&P 500 (FR0011550185), while the currency-hedged iShares S&P 500 EUR Hedged (IE00B3ZW0K18) is sold.
Eurozone yes - Europe no - Emerging Markets like it
In contrast, European equity indices are not very popular with Société Générale clients. "Here, however, a differentiated picture emerges once again within Europe," explains Mohr. Eurozone equities (DE0005933956) are more likely to be bought, while European equity trackers, which also include the UK, are not in demand. This leads to outflows, for example, from the iShares MSCI Europe (Acc) (IE00B4K48X80).
At Lang & Schwarz, leveraged investments are mainly in U.S. technology stocks, but also in the S&P 500 and the Dow Jones. "Here we have demand on both sides, with both buying and selling." Accordingly, there is high demand for the Xtrackers S&P 500 2x Inverse Daily Swap (< LU0411078636>) and Amundi's Leveraged MSCI USA Daily (FR0010755611), he said. The first ETN benefits from falling DAX stocks, the second from rising ones, both with double leverage.
Wörndl sees clear buy-side dominance in emerging markets trackers. "Many buyers are taking advantage of price weakness." That's reflected in the iShares Core MSCI EM IMI (IE00BKM4GZ66), he said.
Sectors: selling health care, technology, financials, energy.
Of the sectors -ETFs with technology stocks were the most traded at Societe Generale the previous week, the healthcare sector now tops the favorites list. However, Mohr reports that the sell lists in the order books here are longer than the buy lists. For example, the iShares S&P 500 Health Care Sector (Acc) (IE00B43HR379) is being sold first and foremost.
The sell side also predominates in technology stocks, the number two sector ETF trade, followed by financials and the energy sector, where selling also dominates the action, according to Mohr.
Fixed income: government bonds instead of corporate stocks
In the fixed income market, Italy and the UK are in focus, but with different implications. "The election victory of the right-wing alliance In Italy led only to moderate spread widening of Italian government bonds against the corresponding German government securities," reports Burkhard Fehling from Commerzbank. However, the tax relief package announced by the British government had pushed the British pound against the U.S. dollar to 1.035 U.S. dollars per pound, its lowest level since 1985 (. Yields on British government bonds have risen sharply.
Demand for bond ETFs at Société Générale is also slightly higher. "We are currently noting more turnover here than in the previous week," reports Mohr. Demand is dominated by U.S. TIPS (IE00BDZVH966), inflation-linked U.S. Treasuries and European government securities with short maturities (FR0010754200). Long-dated U.S. government bonds (<LU1681040652>), on the other hand, are sold. Mohr records little turnover in corporate securities in a weekly comparison.
Wörndl's clients trade a floater (IE00BF5GB717), a floating rate debt instrument, briskly in both directions.
Crypto ETPs: Bitcoin and Ripple purchases
Picking up in demand are the order books of the cryptocurrencies that Wörndle manages. "Especially in bitcoin and ripple trackers, there is a lot of turnover." He notes corresponding buy orders for the 21Shares Bitcoin ETP (< CH0454664001>), which is up a good 12 percent for the week. Ripple is trading primarily with the 21Shares Ripple ETP (CH0454664043).
by: Antje Erhard, 27 September 2022, © Deutsche Börse AG