The major indices remain popular, including the DAX this time. However, in addition to broadly diversified ETFs, investors are currently also focusing on more specialized themes and niches - gaming, cloud computing and artificial intelligence, for example.
2 May 2023. FRANKFURT (Börse Frankfurt). It doesn't always have to be the S&P, MSCI World, Euro Stoxx 50 or DAX. "There is also demand for the exoteric, such as products that focus exclusively on climate-friendly companies or the gaming industry," reports stock trader Jan Duisberg of ICF Bank.
However, the major indices remain the basis. Frank Mohr of Société Générale reports the highest turnover for ETFs tracking global and U.S. equities for the past trading week - with a clear buying overhang. "But then DAX trackers already come in at 13 percent, about double the usual." Buying would be iShares products on the DAX (DE0005933931), for example, but also the S&P 500, the MSCI USA and the MSCI World. Torben Bendt of Lang & Schwarz sees demand especially for U.S. and MSCI World ETFs. Duisberg registers high demand for U.S. stocks (IE00B60SX170), but definitely also for European stocks (IE00B60SWW18).
After the extended weekend, the DAX stands at 15,890 points at midday on Tuesday - not far from the all-time high. Even the end of another US regional bank could not change the good mood in this country. As announced yesterday, the U.S. major bank takes over the struggling U.S. regional bank First Republic Bank.
U.S. equities were shed throughout the first quarter, by the way, Crossflow reports. "The loser in the first quarter is the favorite investment target from last year, products with U.S. indices," writes the Munich-based company, which specializes in ETF trading and analysis and regularly publishes figures on ETFs domiciled in Europe. In 2022, products with U.S. equity indices still had an inflow of a whopping 16 billion euros, it says, but in the first quarter, an investment volume of 2.6 billion euros was lost.
Also interesting: The biggest winner in new investments in the first quarter was China, with an increase of 2.2 billion euros. A lot of money also flowed into regional Asia or emerging market ETFs, with 2.5 billion euros, he said. "Given the geopolitical tensions in the Far Eastern region, this development may well be surprising," Crossflow comments. After all, in addition to China, Taiwan and South Korea also held high shares in the emerging market indices.
"Anyone who underestimates climate risks will be punished".
The Deka MSCI Germany Climate Change (DE000ETFL540) is also well received by ICF customers. DekaBank's Climate Change ETF product family promises "systematic integration of the transition risks and opportunities of climate change with a high degree of diversification." Regional focuses are possible in addition to global diversification ("World"), specifically on Germany, the eurozone, Europe, the USA or Japan. A corporate bond ETF is also part of the product family. "If companies ignore climate change today and do not anchor it in their strategic management, risks will be underestimated and the capital market will punish these companies," Ingo Speich, Head of Sustainability and Corporate Governance at Deka Investment, is convinced. Since the beginning of the year, the Deka MSCI Germany Climate Change has gained 13.3 percent.
Tech industry? Yes, gladly!
As far as sector ETFs are concerned, interest is once again focused on technology stocks. The VanEck Video Gaming and eSports (IE00BYWQWR46) is very popular, as Duisberg notes. Mohr registers inflows into WisdomTree Artificial Intelligence (IE00BDVPNG13) and WisdomTree Cloud Computing (IE00BJGWQN72). The picture is balanced for healthcare ETFs, he said. In contrast, Mohr reports outflows from U.S. energy infrastructure (IE00B8CJW150) and banking ETFs.
Wanted: Gold and vola products
In commodity and precious metals securitizations, gold ETCs and especially Xetra-Gold (DE000A0S9GB0) continue to see a lot of turnover, Bendt adds. Duisberg also notes heavy turnover in WisdomTree S&P 500 VIX Short-Term Futures 2.25x Daily Leveraged (IE00BLRPRH06), an ETN that tracks short-term expected S&P volatility with leverage. "The opportunities are great, but so are the risks."
In bond ETF trading, Bendt said money market ETFs, which have been so popular recently, are now on sell lists. The iShares EUR Ultrashort Bond (IE00BCRY6557), for example, is affected, he said. Société Générale reports sales of government bond ETFs, such as with the Lyxor Euro Government Bond 3-5Y (LU1650488494).
Equities |
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World | Purchases |
USA | Purchases |
Europe | Purchases |
Germany |
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Industries/Topics |
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Technology | Purchases |
Cloud, AI, Gaming | Purchases |
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Bonds |
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Money market | Sales |
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Gold-ETCs | Purchases |
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Vola-ETNs | Purchases |
by Anna-Maria Borse, 2 May 2023, © Deutsche Börse
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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