Equity markets remain sideways, momentum is lacking, ETF trading is rippling along. However, ETFs tend to remain in demand, broadly diversified ones, but also tech stock trackers.
9 May 2023. FRANKFURT (Börse Frankfurt). Directionless markets, quiet trading - not much going on in the ETF business at the moment, traders report. "Turnover is much lower than before Easter, for example, but buying is predominant," reports Frank Mohr of Société Générale. "It's very quiet," agrees Ivo Orlemann, who trades ETFs and active funds for ICF Bank. "It is therefore not easy to identify a trend."
The DAX continues to move sideways on Tuesday morning and remains below the 16,000 point mark. At noon, the index stands at 15,912 points.
"Minimum Volatility currently very much in demand"
According to Mohr, global equities again had the highest turnover last week with 33 percent, with a slight buying overhang, followed by U.S. equities with 32 percent and a slight selling overhang. Portfolios end up with the iShares Core MSCI World (IE00B4L5Y983), for example, but also minimum volatility ETFs such as the iShares Edge MSCI World Minimum Volatility (IE00B8FHGS14). "Minimum volatility is in high demand right now." ETFs tracking U.S. equities tend to sell (IE00B5BMR087), but also buy (FR0011550185) on occasion. Again, comparatively strong turnover: DAX ETFs, favorite here is the iShares Core DAX (DE0005933931).
On the Frankfurt Stock Exchange, DAX ETFs led the way in terms of turnover today (5.5 percent), followed by Euro Stoxx 50 (4.5 percent), MSCI World (4.3 percent), MSCI World Sector Quality (4 percent) and S&P 500 ETFs (3.4 percent). This is followed by the Bloomberg MSCI Euro Corporate 0-3 Sustainable SRI (2.8 percent).
Popularity for water ETFs
In trading sector and theme ETFs, trackers of technology stocks are most in demand, Mohr reports, but so are those of healthcare stocks (IE00B43HR379). The iShares Global Water (IE00B1TXK627) is also doing well, he adds. The $2 billion-plus ETF, which provides access to shares of global water companies, had done extremely well in 2021 but suffered significant losses in 2022. Since the beginning of 2023, it is up 3.9 percent, but over a three-year period, it is up a whopping 13.7 percent a year.
The climate ETF BNP Paribas Easy Low Carbon 100 Europe PAB (LU1377382368) and iShares Automation & Robotics (IE00BYZK4552) are currently on the disposal lists.
As for bond ETFs, it's almost all about government bonds at the moment. "Among our top 10 turnover list, there are only government bond ETFs," notes Mohr. Top seller: the iShares USD Treasury Bond 1-3yr.
Gold ETCs remain hot
In commodity and precious metals securitizations, gold and silver ETCs continue to see a lot of turnover, notes Fabian Wörndl of Lang & Schwarz. He reports mainly purchases, favorite is still Xetra Gold (DE000A0S9GB0). Orlemann of ICF also registers a lot of turnover for ETNs that track the DAX with leverage, specifically the WisdomTree DAX 3x Daily Leveraged (IE00B878KX55) and the WisdomTree DAX 3x Daily Short (IE00B8GKPP93). "There's always a little bit going on." Things have been quieter around crypto ETNs, according to Wörndl. "We haven't seen much in the last few days."
Rhodium (DE000A1KJHG8) and sugar (GB00B15KY658) ETCs performed the best among all ETPs - that is, ETFs, ETCs and ETNs - in April, followed by VanEck Crypto and Blockchain Innovators (IE00BMDKNW35), according to Morningstar. ETFs tracking Eastern European equity markets ex-Russia also performed well, such as the iShares MSCI Poland (IE00B4M7GH52). The winning ETPs gained between 12 and 23 percent over the past month.
At the other end of the list are crypto ETNs, such as Algorand, Stellar and EOS trackers. Also suffering significant losses were the Electric Vehicle Charging Infrastructure (IE000HMSHYJ6), Global X Hydrogen (IE0002RPS3K2) and First Trust Nasdaq Clean Edge Green Energy (IE00BDBRT036) ETFs. The losers were down between 15 and 21 percent in April.
Shares |
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World | Purchases |
USA | Sales/Purchases |
Germany | Purchases |
Minimum Volatilty | Purchases |
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Industries/Topics |
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Technology | Purchases |
Health | Purchases |
Water | Purchases |
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Gold ETCs | Purchases |
by Anna-Maria Borse, 9 May 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
Borse