Despite the price losses of the past few days, inflows into equity ETFs remain high. Trading volume in the fixed income segment increases. Future themes such as clean energy and future mobility are consistently popular.
1 December 2021. Frankfurt (Börse Frankfurt). Despite uncertainties caused by the emergence of the South African coronavirus variant, ETF investors leave behind what has become known as Black Friday with its price losses. Shares are selectively bought again, after the previous week the sell lists were longer than the buy lists.
"Black Friday had a different meaning on the stock exchange than in the retail sector," says Carsten Schröder of Société Générale. Even before that, investors had been reluctant to take large positions in view of the valuations and the risks. The uncertainties remain. "A DAX below 15,000 is definitely within reach." Most recently, the DAX stood at 15,061 points, but made plus 200 points on Wednesday morning.
Shares "not really cheap"
For Hubert Heuclin of BNP Paribas, equities are also not yet cheap and, given the thin turnover on Friday, there is "still a long way to go to make up for these price losses." For now, he is seeing some inflows into equity ETFs with a global or U.S. focus.
Fabian Wörndl of Lang & Schwarz reports, "We have a lot of buying at the beginning of the week, setbacks are used immediately." Thus, he sees inflows in classics such as the MSCI World. At a weaker level, emerging markets were also in demand again. "With falling oil prices, Russia ETFs were initially on the sell side, but at the beginning of the week investors are also getting back in." Buying here, he said, was the Shares MSCI Russia ADR/GDR UCITS ETF (<IE00B5V87390>).
Shares initially in broad distribution very much in demand - until Friday
Schröder summarizes his trading week: In the course of the week, ETFs with German, European and U.S. stocks were initially bought. He registered inflows mainly in the iShares Core DAX UCITS ETF (DE) EUR (Acc) (< DE0005933931)>, UBS MSCI USA SF UCITS ETF (<IE00B3SC9K16>) and Lyxor EURO STOXX 50 (DR) UCITS ETF - Acc (FR0007054358). "Then on Friday, trading directions reversed, with European equities in particular selling off." He registered outflows from the Xtrackers EURO STOXX 50 UCITS ETF 1D (< LU0274211217>) and the Amundi MSCI Europe UCITS ETF - EUR (C) Price (LU1681042609), but also from the globally investing iShares Core MSCI World UCITS ETF USD (Acc) (IE00B4L5Y983).
In the U.S. market, Heuclin sees inflows primarily in the Invesco S&P 500 UCITS ETF (IE00B3YCGJ38) and in global investments in the iShares MSCI ACWI UCITS ETF (IE00B6R52259). In Europe, he reports inflows primarily in favor of sustainable ETFs such as the Fidelity Sustainable Research Enhanced Europe Equity UCITS ETF (<IE00BKSBGT50<).
Financial stocks sold: Hopes of interest rate hikes and yields fading
On the sell side, in terms of individual sectors, Heuclin's clients are parting ways with the iShares STOXX Europe 600 Automobiles & Parts UCITS ETF (DE000A0Q4R28), the iShares STOXX Europe 600 Oil & Gas UCITS ETF DE (DE000A0H08M3). The one in the financial sector is also no longer in demand, he said. Here, the Lyxor EURO STOXX Banks DR UCITS ETF (LU1829219390) in particular is being sold.
Schröder also sees outflows from financial ETFs, which were disproportionately high, especially on Friday: "Investors fear that with the new viral variant, interest rate hikes will become more distant and banks will have to forgo further income here." The iShares EURO STOXX Banks 30-15 UCITS ETF (DE) (DE0006289309) is being dumped, he said.
It's a different story in the technology sector, whose equity ETFs are trading relatively evenly, according to Schröder.
Wörndl reports good turnover, but strong sales of shares in trackers from the energy sector: primarily, the ETFs Xtrackers MSCI Europe En.ESG Scr.UE 1C (<LU0292101796>) and Lyxor STOXX Europe 600 Oil & Gas UE (LU2082998167) are taken out of the portfolios.
Mining ETFs in demand
Instead, Wörndl said alternatives such as gold are in demand, as evidenced by rising inflows into mining ETFs, particularly the Shares Gold Producers UCITS ETF USD (Acc) (IE00B6R52036) and VanEck Vectors Global Mining UCITS ETF (< IE00BDFBTQ78>).
Future topics remain on buy lists
ETFs on trend themes remain on Schröder's buy lists: "We see high interest in Clean Energy and Future Mobility." On the product side, this is reflected in purchases of the L&G Clean Energy UCITS ETF (<IE00BK5BCH80) and the Lyxor MSCI Future Mobility ESG Filtered (DR) UCITS ETF (LU2023679090).
Towards government bonds, away from corporates
Bond ETFs are in demand again - "classically, when stocks are sold," Schröder explains the rotation. In particular, government bonds with high credit ratings are in demand. The Amundi Index J.P. Morgan EMU Government Investment Grade UCITS ETF DR EUR (C) (LU1437018598) generated large inflows. Xtrackers II Eurozone Government Bond UCITS ETF 1C Price (LU0290355717) is also doing well, they say.
In unison, traders report selling European corporate bond ETFs. For Schröder, sales are piling up, especially those with maturities of up to three years, such as the Amundi Euro Corporate Sri 0-3 Y UCITS ETF (LU2037748774). Schröder also sees returns in the Amundi US Corp SRI UCITS ETF (Acc) (LU1806495575). Heuclin notes that BNP Paribas clients are selling mostly high-yield European corporate bonds. For example, the iShares EUR High Yield Corp Bond UCITS ETF (IE00B66F4759) is being removed from portfolios, while in the U.S., a Short ETF with corporate bonds in the 3 to 5 year maturity band, the iShares USD Short Duration Corp Bond UCITS ETF (IE00BCRY5Y77)
Crypto ETNs - better sentiment after strong sales
With the price decline of many cryptocurrencies, the sell lists of crypto ETNs also initially became longer. "But here, the mood has turned again at the beginning of the week," reports Wörndl. "Especially Krpyto currencies, which are considered successors to Bitcoin or Ethereum, are being bought, and investors are looking for smaller alternatives." He also sees demand for Polkadot with the 21SHARES POLKADOT ETP ETC (CH0593331561), Solana with the VanEck Vectors Solana ETN (DE000A3GSUD3) and the 21Shares Solana ETP (CH1114873776), and Cardano, with the 21Shares Cardano ETP (CH1102728750).
Shares | |
USA | Sales and Buys |
World | Sales and Buys |
Europe | Sales and Buys |
Emerging Markets | Sales and Buys |
Industries | |
Banks | Sales |
Technology | Buys and Sales |
Sustainability | Buys |
Energy | Sales |
Bonds | |
Corporate Bonds Europe | Sales |
High Yield Corporate Bonds Europe | Sales |
Corporate Bonds USA, Europe | Buys |
Krypto-ETNs | Sales and Buys |
written by: Antje Erhard, 1 December 2021, © Deutsche Börse AG