Sentiment in the ETF market is brightening. Despite price rises here at home, German and European equities are being sold in favor of global and US equity trackers.
8 November 2022. Frankfurt (Börse Frankfurt).The strong, rapid recovery in equity markets is fueling buying interest in the ETF market. "Investors are abandoning their caution, and we are seeing orderly trading with high volume and a slight buying overhang," reports Frank Mohr of Société Générale. "Sentiment is good," he adds. Fabian Wörndl of Lang & Schwarz also sees more volume in ETF trading and a strong focus on equities.
Equity trackers: buying on the one hand - rebalancing on the other hand
In Société Générale's day-to-day business, U.S. equity ETFs and global equity trackers once again stand out as favorites, while European and German indices tend to be sold. "We are seeing shifts in favor of the U.S. and global stocks, although the market trend here at home is positive," reports Mohr. Investors may see more opportunities in the U.S. and globally than in German and European stock markets. Wörndl's clients also focus primarily on global stock indices. "But we also see that investors are hedging or speculating," Wörndl reports. Accordingly, the volatility index VIX (IE00BLRPRH06>) is bought and sold.
Among the most frequently bought U.S. equity trackers at Société Générale are the Lyxor MSCI World (FR0010315770) and the Invesco S&P 500 (IE00B3YCGJ38). Among German equity ETFs, Mohr reports declines in the iShares Core DAX (DE0005933931). Among European indexes, Xtrackers MSCI Europe (LU0274209237) is most notably on the sell lists.
Mohr
Asia: More fantasy and hope for opening
In trading at Lang & Schwarz, Asian index funds are also in focus. "The hope for a renewed opening of the country after the long Covid lockdowns certainly plays a role here," explains Wörndl. "We have significantly more volume here than in previous weeks." Buying, he says, is the iShares Core MSCI Pacific ex Japan (IE00B52MJY50). Wörndl is also seeing inflows in Global X China Clean Energy (IE000TMA7T63).
Sectors: Technology and energy bought
The energy sector, where buying dominates, is the most traded of the week among sectors at Societe Generale. Mohr notes particularly high demand for the iShares S&P 500 Energy Sector (IE00B42NKQ00), which is up just over 2 percent for the week and just over 14 percent for the month.
Wörndl also reports more turnover in energy stocks. For example, he says interest in the iShares Oil & Gas Exploration & Production (IE00B6R51Z18) has been strong.
According to Mohr, inflows also predominate in technology stocks. Here, investors* would reach for the Invesco Global Buyback Achievers (IE00BLSNMW37) and the iShares Digitalisation (IE00BYZK4883).
Buys also predominate in Societe Generale's third-strongest sector. The SPDR MSCI World Health Care (IE00BYTRRB94) is in demand. But also real estate products are moving back into investor interest and record inflows. Although the price balance for the week is slightly negative, Invesco US Real Estate Sector (<IE00BYM8JD58>) is bought.
Cryptos: More business again
With recent price gains, Wörndl notes more interest in crypto ETNs. However, sales and purchases were in balance, he said. For example, the 21Shares FTX Token ETP (<CH1145930983>) is being sold off. The 21Shares Binance BNB ETP (CH0496454155), on the other hand, was receiving funds.
Precious Metals: Xetra Gold Popular
A lot is going around in precious metals, especially in gold ETNs, according to Wörndl. "Here, however, there is no clear trend, it is traded in both directions." Xetra Gold (DE000A0S9GB0) is particularly popular, he said.
Fixed income: selling corporate bonds
In the bond market, comments by ECB chief Christine Lagarde that the ECB will not allow high inflation to take hold are also yield drivers, according to Burkhard Fehling of Commerzbank. Now the markets would look to the midterm elections for the U.S. Congress.
In fixed income ETF trading, Mohr notes normal trading volume. "This week, government bond purchases dominate bond ETF trading," he reports. For example, British government securities in iShares Core UK Gilts (<IE00B1FZSB30>) would be bought. In contrast, European corporate bonds of various maturities (IE00B3F81R35) (LU2300294316) would be sold.
Equity Germany
Equity | |
World | Purchases |
Equity USA | Purchases |
Equity Europe | Sales |
Equity Germany | Sales |
Industires | |
Energy | Purchases |
Technology | Purchases |
Health | Purchases |
Real Estate | Purchases |
Krypto | Purchases and Sales |
Precious metals | |
Gold | Purchases and Sales |
Fixed Income | |
Brit. Government bonds | Purchases |
Europ. Corporate Bonds Short-Term | Sales |
Europ. Corporate Bonds | Sales |
from: Antje Erhard, 8 November 2022, © Deutsche Börse AG
Antje Erhard is a journalist and moderator specialising in the stock market, business and finance.
Feedback and questions to redaktion@deutsche-boerse.com.
Erhard