No one is deterred by treading water, and buying dominates. Nasdaq ETFs are also doing well - despite or perhaps because of the rebalancing in the index.
25 July 2023. FRANKFURT (Börse Frankfurt). Sideways movement in the market ahead of central bank decisions this week, and then the summer break - things are currently leisurely in ETF trading. "It was a quiet week," reports Frank Mohr of Société Générale. "However, purchases continue to clearly predominate." Fabian Wörndl of Lang & Schwarz also sees mainly inflows into ETFs, especially MSCI World and S&P 500 trackers. The DAX has been hovering around 16,100 points since the middle of the month, with 16,200 points at midday on Tuesday.
"Magnificent 7" in Nasdaq slowed down
A big topic is the Nasdaq rebalancing. The U.S. stock exchange operator Nasdaq has capped the weightings of individual stocks in the Nasdaq 100, with effect from yesterday, Monday. The background is the strong price increase of the "Magnificent 7", i.e. the tech stocks Amazon, Apple, Alphabet, Microsoft, Meta, Tesla and Nvidia. They accounted for 58 percent of the index at the beginning of July, since yesterday it is a maximum of 44 percent. The "Magnificent 7" are said to have contributed more than 30 percentage points to the index's 39 percent increase in the first half of the year. The rebalancing was the first of its kind and is intended to prevent fund managers from violating a diversification rule of the U.S. Securities and Exchange Commission (SEC).
At Société Générale, this was reflected in higher turnover of Nasdaq ETFs, with a clear buying overhang. "The advantage is the now better diversification," notes Mohr. However, he adds, index composition is now no longer by market capitalization in pure form, and there is also active intervention in a passive product. "Some people are also complaining that the best stocks are now being thwarted." Wörndl of Lang & Schwarz sees little impact in trading. "It hasn't really had an impact on us."
Mohr
Buying mood continues
As usual, MSCI World and USA trackers are showing the highest turnover anyway. Mohr reports inflows into MSCI World ETFs from iShares and Amundi (IE00B4L5Y983, <LU1737652237>) and S&P 500 trackers from Invesco and Vanguard (IE00B3YCGJ38, <IE00B3XXRP0>). The picture is mixed for German and European equities: "We are seeing increased buying of DAX ETFs," explains Wörndl. According to Mohr, on the other hand, outflows dominate (DE0005933931). In European equities, he sees buying and selling.
Tech stocks: confidence continues
In the sector index fund business, technology ETFs are once again leading the way, followed by healthcare ETFs, according to Mohr. Popular, for example, is the iShares Automation & Robotics (IE00BYZK4552), which now has more than 3 billion euros in assets under management. Also in demand: the Xtrackers MSCI World Information Technology (IE00BM67HT60), which has over 2.2 billion euros. Since the beginning of the year, prices have risen 23 percent and 36 percent, respectively; over three years, they are up 11.7 percent and 17.9 percent for the year. Healthcare stocks, on the other hand, are sometimes bought (IE00BJ5JNZ06), sometimes sold (IE00BCHWNW54).
In bond ETF trading, most activity continues to revolve around money market and near-money market products. Particularly popular: the iShares EUR Ultrashort Bond (IE00BCRY6557) and the Lyxor Euro Overnight Return (FR0010510800).
More going on in crypto trading
Meanwhile, brisker trading in crypto ETNs continues, Wörndl notes. A ruling favorable to the cryptocurrency Ripple - and running against the line of the Securities and Exchange Commission (SEC) - regarding its character as a security had caused the price of the Ripple cryptocurrency XRP to explode a week and a half ago. Most recently, however, it went down again.
Wörndl reports purchases and sales alike for the 21Shares Ripple XRP (CH0454664043). Its price had climbed from 12 euros to a peak of 21.60 euros, currently it is 18 euros. According to the trader, a lot is also going on in the DDA Physical Bitcoin (DE000A3GK2N1), and on both sides. The bitcoin price has fallen below $30,000 again, currently it is $29,126.
Equities | |
USA | Purchases |
World | Purchases |
Europe/Germany | Purchases/Sales |
| |
Indurstries |
|
Technology | Purchases |
| |
Bonds | |
Money market | Purchases |
| |
Crypto | |
Bitcoin | Purchases/Sales |
Ripple | Purchases/Sales |
by: Anna-Maria Borse © 25 July 2023, Deutsche Börse AG
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
Feedback and questions to redaktion@deutsche-boerse.com
Borse