The bankruptcy of Silicon Valley Bank and the emergency rescue of Credit Suisse seem to have been digested for the time being. Bank stocks and ETFs are clear losers, while gold ETCs and crypto ETNs are winners. Traditional equity ETFs also remain in demand.
28 March 2023. Frankfurt (Börse Frankfurt). Calm has returned to the stock markets - and also to the ETF market. "Yesterday and today we are seeing the usual day-to-day business again," explains Jan Duisberg of ICF Bank. The previous week was extremely grueling. After the forced takeover of Credit Suisse by UBS, the DAX had fallen to 14,600 points last Monday. "That was a real shocker". Then on Friday, concerns about Deutsche Bank pushed the index back down. Already since yesterday's Monday recovery is announced, on Tuesday noon, the DAX stands at 15,160 points. "On the market has arrived: The banks have problems with bonds that are worth less due to the rise in interest rates, but you can live with it," notes Duisberg.
ETF trading was busy. "High volatility, high turnover," is how Frank Mohr of Société Générale sums it up. He reports significantly more buying than selling. "Investors are reacting, some are also selling, but there was certainly no panic." However, the situation of the banks will continue to be closely monitored, he said. "The uncertainties in the banking sector have left a clear impression on investors," reports Holger Heinrich of Baader Bank, meanwhile. He reports more selling than buying. "That's relatively rare to see."
German and European stocks particularly strong in sales
What's unusual at Société Générale: the high share of DAX ETFs in turnover. "Normally, these account for around 6 percent, this time it was 12 percent," Mohr explains. Both sides were played, but with a slight selling overhang. For example, the Xtrackers DAX (LU0274211480) and the iShares Core DAX (DE0005933931) are on the sell lists.
Heinrich observes similarly, "Our top sellers are mainly European ETFs." This is rather atypical, he says. "Normally, the ratio is balanced." Small cap (IE00B02KXM00) and minimum volatility ETFs (LU1681041627) were the focus of interest at Baader Bank. There was also a lot of turnover in broad market products, such as MSCI Europe trackers from Deka (<DE000ETFL086>), Euro Stoxx ETFs from iShares (DE0005933956) and Amundi (FR0010790980) and DAX 50 index funds from Lyxor (DE000ETF9090). Customers of ICF put a lot of money on the Deka Euro Stoxx 50 (DE000ETFL029).
At Société Générale, USA and MSCI World ETFs show the highest turnover, Mohr adds. "This is where the purchases predominate." S&P 500 (IE00B5BMR087) and MSCI World (<LU1737652237>) ETFs ended up in the portfolios. ICF's Duisberg sees lots of buying in Deka MSCI USA (DE000ETFL268), while Baader Bank's Heinrich is in MSCI USA trackers and small cap products.
Financials fly out
In the trade with sector ETFs dominate - not surprisingly - financial stocks. Mohr reports many sales, such as of the iShares Euro Stoxx Banks 30-15 (DE0006289309) and the Invesco Euro Stoxx Optimised Banks (IE00B3Q19T94). Both have lost heavily in recent weeks, but are still slightly up year-to-date.
Mohr
Société Générale is also seeing a lot of turnover in energy ETFs (IE00BWBXM492) - with mostly outflows - and technology ETFs (IE00B3WJKG14) with mostly inflows. Duisberg also sees high turnover in VanEck Global Mining (IE00BDFBTQ78) and L&G Hydrogen Economy (IE00BMYDM794).
A lot going on in bond ETFs, too
Bond ETFs are also popular. "Turnover has been exceptionally high," reports Mohr. He reports buying for European corporate bonds, such as with the iShares Core Euro Corp Bond (IE00B3F81R35), and for short-dated European government bonds with good credit ratings, such as with the Amundi Govt Bond Euro Broad Investment Grade 1-3 (<FR0010754135>). British corporates with maturities of up to five years, on the other hand, would be on the down lists.
Gold and bitcoin? Yes, gladly!
Clear crisis winners are gold and cryptocurrencies. The gold price rose at the peak to 1,988 U.S. dollars the troy ounce, the Bitcoin to over 28,000 U.S. dollars. Duisberg reports that investors* relied on gold ETCs such as Invesco Physical Gold EUR Hedged (XS2183935274) and WisdomTree Physical Swiss Gold (JE00B588CD74). Among cryptocurrency ETNs, the 21Shares Ethereum (CH0454664027) and the VanEck Bitcoin (DE000A28M8D0) were particularly well received.
The fact that very few active funds manage to beat passive products is once again shown by Morningstar's Active/Passive Barometer, which was published in the middle of the month. "In the particularly challenging 2022 environment, one would expect active managers to outperform their passive peers," said Monika Dutt of the analysis firm. But only 29 percent of active equity funds survived and outperformed their passive peers. Particularly bitter for fans of active funds: the longer the period, the worse the performance: in the ten years to December 2022, the success rate of active managers was below 25 percent in almost two-thirds of the 72 categories of the various asset classes studied, and over a 20-year horizon it is even less.
Equities | |
DAX | Sales/Purchases |
Europe | Purchases |
USA | Purchases |
World | Purchases |
Industries | |
Banks | Sales |
Krypto-ETNs | Purchases |
Gold-ETCs | Purchases |
by: Anna-Maria Borse, 28 March 2023, © Deutsche Börse
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
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