Although all-time highs are currently being seen in the USA and not here, European trackers are more in demand among ETFs. Interest in Asian equities is also high. There is also a lot going on in crypto ETFs.
23 January 2024. FRANKFURT (Börse Frankfurt). Record after record in the USA: the Dow Jones, S&P 500 and Nasdaq 100 all reached record highs yesterday, Monday. The DAX, on the other hand, is currently at 16,654 points, some way below its all-time high of 16,993.60 points from December. "The stock markets showed a mixed picture. While the DAX lost ground, the American indices gained," notes Holger Heinrich from Baader Bank. Overall, he sees a buyer overhang in ETF trading, with slightly higher turnover. ETF trader Jan Duisberg from ICF Bank also reports good turnover, with purchases and sales.
According to Duisberg, traditional equity ETFs are being traded in particular, but also more specialized products such as the Deka Stoxx Europe Strong Growth 20 (DE000ETFL037). "The greatest interest was in European products," notes Heinrich. In addition to EuroStoxx 50 (LU0274211217) and Stoxx Europe 600 ETFs (LU2581375156), this also applied to MSCI Europe Minimal Volatility (IE00B86MWN23) and dividend products such as Franklin European Quality Dividend (IE00BF2B0L69).
DAX and Nasdaq: also available with leverage
"The situation is similar for World products," adds Heinrich. There is a lot of interest in classic MSCI World products, but also their ESG variants (IE00BFNM3K80). "As with the Europeans, there is also interest in minimum volatility and small caps." Demand for US equities is more subdued than usual. S&P 500, Dow Jones and Nasdaq 100 trackers were particularly strong.
Duisberg is also currently seeing a lot of trading in ETNs with leverage, in both directions. Examples include the WisdomTree DAX 3x Daily Leveraged (IE00B878KX55) and the WisdomTree DAX 3x Daily Short (IE00B8GKPP93). Also extremely popular: the leveraged Nasdaq trackers from WisdomTree, long and short (IE00BLRPRL42, IE00BLRPRJ20).
Highs in Japan, lows in China
According to Duisberg, interest in Chinese shares is currently striking. "China's markets have just experienced new lows." The Deka MSCI China ex A Shares (DE000ETFL326), for example, is being snapped up. Andreas Schröer from Lang & Schwarz is also currently observing relatively high turnover in Asian equities, and not just Chinese equities. India's stock market is attracting more attention than usual, for example with the iShares MSCI India (IE00BZCQB185), as is Japan's stock market, for example with the Amundi Index MSCI Japan SRI PAB (LU1646360542).
Japan's shares are booming in contrast to China's: Japan's Nikkei rose to its highest level in 34 years today, Tuesday. As far as Chinese equities are concerned, the focus at the ICF is on HSBC Hang Seng Tech with technology stocks traded in Hong Kong (IE00BMWXKN31). Schröer notes that there is rather little turnover in broadly diversified emerging markets ETFs.
The MSCI Emerging Markets has been lagging behind the MSCI World for some time now. According to the index provider MSCI, the MSCI World returns 7.3%, 12.8% and 8.6% per year over three, five and ten years (as at the end of December 2023), while the MSCI Emerging Markets returns minus 5%, plus 3.7% and plus 2.7%.
Battery and hydrogen ETFs disappoint
According to Duisberg, most trading in sector ETFs is once again focused on technology stocks. He observed a lot of inflows, but also outflows for the L&G Battery Value-Chain (IE00BF0M2Z96) and the L&G Hydrogen Economy (IE00BMYDM794).
The Battery ETF tracks companies that produce metals required for batteries or develop battery technologies. The ETF, which was launched on the market in 2018, performed very well at the beginning, scoring a return of 15.7% per year over a five-year period. Over three years, however, it is in the red. The hydrogen ETF issued in 2021 is performing even worse. "It has only brought investors losses so far," says Duisberg.
Cryptos continue to generate strong turnover
There is also a lot going on in crypto ETNs. According to Duisberg, there is a lot going on in VanEck Bitcoin (DE000A28M8D0), but also in Solana (GB00BNGJ9G01, CH1114873776) and Ethereum ETNs (CH0454664027). Schröer from Lang & Schwarz is also registering good turnover in crypto ETNs. "However, the second tier is currently more affected, such as Solana trackers."
Speculation about the approval of a Bitcoin spot ETF by the US Securities and Exchange Commission (SEC) drove Bitcoin to over USD 45,000 in the first week of January. After the approval almost two weeks ago, however, the price fell. At midday on Tuesday, it was USD 39,008 - a seven-week low.
By Anna-Maria Borse, 23 January 2024 © Deutsche Börse AG
Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.
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