The strong price gains since the beginning of the month are attracting investors to the ETF market, with S&P 500 trackers continuing to be the big sellers. ESG and climate ETFs of very different types are also in demand.
29 November 2022 Frankfurt (Börse Frankfurt). U.S. trackers remain the favorites in ETF trading. "ETFs with U.S. equities accounted for 42 percent of our equity ETF turnover, with a clear buyer overhang," reports Frank Mohr of Société Générale. The picture is similar at Baader Bank: "US products were more popular than European ones," explains Holger Heinrich. He also reports more purchases than sales, also for the market as a whole.
However, there was not much activity due to the holidays in the USA. "Due to Thanksgiving week, we recorded fewer sales than in the previous week," notes Heinrich. "Turnover was rather below average," Mohr also notes.
S&P trackers in demand - no matter from whom
S&P 500 trackers are clearly the most popular at the moment. At Société Générale, turnover falls on ETFs from BNP Paribas Easy (FR0011550185), Vanguard (IE00B3XXRP09) and - currency-hedged - iShares (IE00B3ZW0K18); at Baader Bank, from Xtrackers (LU2009147757) and Lyxor (LU0959211243). The S&P 500 has recently been able to recover significantly, but still comes to a minus of 17 percent since the beginning of the year. The DAX, on the other hand, has been able to recover a larger part of its losses, and is now only down 10 percent since the beginning of the year.
Mohr
Europe's equities are wallflowers
According to Mohr, MSCI World ETFs, such as the "classic" iShares Core MSCI World (IE00B4L5Y983), are also doing well. European equities hardly play a role, according to traders. At most, Heinrich sees interest in FTSE 100 ETFs, which track U.K. stocks.
The protests in China are putting Chinese stocks back in focus. "There is more going on than usual with us," notes Fabian Wörndl of Lang & Schwarz. "Sometimes people are selling, sometimes buying." Tending to be sought after, he says, is the Xtrackers CSI300 Swap (LU0779800910). The price has lost again after a short recovery at the beginning of November, since the beginning of the year now stands a minus of 23 percent.
Perennial favorites: ESG and climate ETFs
ESG variants of the major indices continue to attract a lot of attention, such as the UBS MSCI World Climate Paris Aligned (IE00BN4Q0370), according to Heinrich, and the iShares MSCI Europe Quality Dividend ESG (IE00BYYHSM20), according to Wörndl.
A favorite at Baader Bank remains Invesco Wind Energy (IE0008RX29L5). The ETF, which was only launched in September this year, tracks companies from the wind energy sector, currently including PNE, Nordex, SMA Solar Technology, Schneider Electric and Arcadis. Landing in the portfolios of Société Générale clients is L&G Hydrogen Economy (IE00BMYDM794). "And the iShares Global Clean Energy (IE00B1XNHC34) is actually always there."
Share price up 81 percent: cash in on energy ETFs
As far as sector ETFs go, Mohr says a lot is currently about energy. However, he says these are now often on the down lists, such as the SPDR S&P US Energy Select Sector (IE00BWBXM492) and Xtrackers MSCI World Energy (IE00BM67HM91). Apparently, profits are being taken, as both are up a whopping 81 percent for the year, with SPDR's ETF up 81 percent and Xtrackers' up 63 percent.
Index funds with stocks from the healthcare industry, on the other hand, would continue to be bought, according to Mohr (LU0533033238). In the high-turnover technology stocks, inflows and outflows balanced each other out. Basic materials ETFs, number four on the turnover list, tended to be sold (LU0292100806). Also sought after, according to Wörndl: the iShares Global Infrastructure (IE00B1FZS467).
Corporate bonds also in demand again
Turnover in bond ETFs is conspicuously high at the moment. "They accounted for 40 percent of our turnover last week, much more than usual," explains Frank Mohr. It is predominantly bought, both government (IE00B3FH7618) and corporate bonds (IE00B3F81R35). "Speculative investors also bet on the ComStage Bund Future Short (<LU0530119774>)."
Equity |
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USA | Buy |
World | Buy |
China | Buy/sell |
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Fixed income |
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Government Europe | Buy |
Corporates Europe | Buy |
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Sectors |
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Energy | Sell |
Health | Buy |
Technology | Buy/sell |
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by Anna-Maria Borse, 29 November 2022, © Deutsche Börse AG