The quite strong price setback last week could not spoil the buying mood in ETF trading for long. On a weekly basis, inflows dominate. Especially U.S. stocks are popular, but also emerging market stocks and more specific such as oil stocks.
28. September 2021. FRANKFURT (Börse Frankfurt). Sunday's federal election already seems to be a done deal. The feared red-green-red coalition will not happen, and the stock market players can happily live with "traffic light" and "Jamaica". "We have not seen increased turnover in ETFs with German stocks, just the usual," notes Fabian Wörndl of Lang & Schwarz. Worries about China's teetering real estate giant Evergrande have also diminished somewhat.
The DAX stands at 15,368 points on Tuesday, lower than yesterday. However, the low of 15,078 points from last week is still away. The U.S. stock markets have also recovered.
US equities preferred
The bottom line is that, on a weekly basis, purchases predominated, as Hubert Heuclin of BNP Paribas notes - in equities and bonds. He reports inflows into global and U.S. equities and outflows from European equities. Popular choices include the iShares Core MSCI World (IE00B4L5Y983) and its counterpart from Xtrackers (IE00BJ0KDQ92).
Heuclin
Heuclin reports many positions in the iShares Core S&P 500 (IE00B5BMR087), but also in products from Invesco (IE00B3YCGJ38) and Vanguard (IE00B3XXRP09), as well as the ESG version from UBS (IE00BHXMHL11). On the other hand, he registers outflows on a very large scale for the Xtrackers S&P 500 Equal Weight (IE00BLNMYC90). European equities are also on the sell lists with MSCI EMU or MSCI Europe ETFs. Swedish stocks, so sought after the previous week, also fly out of portfolios.
Despite Evergrande: Emerging markets ETFs in demand
The Evergrande case is not deterring investors from emerging markets positioning. Apparently, however, sustainability should play a role: According to Heuclin, investors are buying Amundi MSCI Emerging Markets SRI (LU1861138961) and Xtrackers MSCI Emerging Markets ESG (IE00BG370F43). "Even if Evergrande doesn't have a direct impact on the other emerging markets: China's weight in MSCI Emerging Markets is large," notes Heuclin. Indeed, China now accounts for 34 percent of MSCI Emerging Markets. With Tencent, Alibaba, Meituan, China Construction Bank and JD.com, five Chinese companies are among the ten largest individual stocks.
Lang & Schwarz clients are also interested in emerging market equities, but they position themselves directly in Indian and Brazilian stocks. The Franklin FTSE India (IE00BHZRQZ17) is up 33 percent year-to-date, while the Xtrackers MSCI Brazil (LU0292109344) is down 5 percent.
Oil price rise lures in oil producers
The sharp rise in oil prices also has investors betting on oil producer ETFs, Wörndl reports, such as the iShares Stoxx Europe 600 Oil & Gas (DE000A0H08M3). The Brent price is over $79 today - as high as it was last in 2018. Shares of battery manufacturers are also doing well at the moment, for example with WisdomTree Battery Solutions (IE00BKLF1R75). BNP Paribas clients are saying goodbye to Xtrackers MSCI World Health Care (IE00BM67HK77) and going for the iShares Euro Stoxx Banks 30-15 (DE0006289309).
Despite the Corona crisis, the MSCI World Health Care has underperformed the broad MSCI World this year and over three and five years - albeit only slightly. While the MSCI World Health Care has gained 17.6 percent since the beginning of the year and has risen by 15.4 and 14.3 percent p.a. over three and five years, the MSCI World has gained 18.3 percent and 15.6 and 15.4 percent. The MSCI World Health Care tracks large and mid-sized healthcare companies from 23 developed countries. Heavyweights are currently Johnson & Johnson, United Health, Roche, Pfizer and Abbott Laboratories.
Bond ETFs: Buy, (almost) no matter what.
In bonds, inflows are spread fairly evenly among government, corporate and mixed ("aggregate") bond ETFs, Heuclin notes. In corporate bonds, investors favor U.S. securities, such as the iShares USD Corp Bond (IE0032895942), but also buy European bonds (IE00B66F4759). Eurozone, EU and US government bonds are also in demand.
Equities | |
USA | Buys |
World | Buys |
Europe | Sales |
Emerging Markets | Buys |
Industries | |
Oil | Buys |
Banks | Buys |
Health | Sales |
Battery manufacturer | Buys |
Bonds | |
Corporate Bonds USA/Europe | Buys |
Government Bonds USA/Europe | Buys |
written by Anna-Maria Borse, 28. September 2021 © Deutsche Börse