The increased volatility on the markets is causing more sales. And despite weak stock markets, it's not just sales. AI ETFs continue to do really well. Among bond ETFs, not only money market but also government bond trackers are gaining ground this time.
31 October 2023. FRANKFURT (Börse Frankfurt). ETF trading is now much busier again. "Turnover has risen steadily and developed very well last week," explains Frank Mohr from Société Générale. At the same time, the mood remains depressed. The DAX stands at 14,793 points at midday on Tuesday, once again below the level of the previous week - and far below the July high of 16,524 points.
Still, ETFs continue to pull ahead. "We are recording around 30 percent more purchases than sales this time, and that despite another weak stock market week," reports Holger Heinrich from Baader Bank. Frank Mohr also sees a clear buying overhang. Most of the buying is currently centered around U.S. stocks. Last week, tech giants such as Alphabet and Meta had disappointed with their figures, causing prices to tumble. "The company's third-quarter numbers are making themselves felt, so U.S. stocks are on the sell lists." S&P trackers from Vanguard (IE00B3XXRP09) and iShares (IE00B5BMR087), for example, as well as Nasdaq ETFs (IE00B53SZB19) are flying out of portfolios. On the other hand, MSCI World ETFs are being bought. European stocks are sometimes bought, sometimes sold, with high turnover.
Leo Puschmann of Lang & Schwarz reports purchases and sales for ETFs on the major indices DAX, S&P 500 and Nasdaq. However, two Nasdaq ETNs with leverage are clearly in demand: the WisdomTree Nasdaq 100 3x Daily Leveraged (IE00BLRPRL42) and the WisdomTree Nasdaq 100 3x Daily Short (IE00BLRPRJ20).
Alphabet figures spook
Tech stocks are once again the heavyweights in sector ETF trading. However, as Mohr notes, this time the sales are predominant - with one exception: ETFs with a focus on artificial intelligence, specifically the Amundi MSCI Robotics & AI ESG Screened (LU1861132840) and the Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51). Energy ETFs are also trending bought, while bank ETFs (IE00B3Q19T94) are selling, he said.
Heinrich reports high turnover in U.S. healthcare and U.S. communications ETFs. Puschmann also says iShares Global Clean Energy (IE00B1XNHC34) is in high demand. That tracks companies in the renewable energy sector, from both developed and emerging markets. Current heavyweights are First Solar, Vestas Wind, Enphase, China Yangtze Power and Orsted. The ETF has lost a lot this year, down 35 percent since the beginning of the year.
Government bonds with longer maturities popular
In bond ETF trading, money market and near-money market ETFs are once again the big sellers, specifically Xtrackers II EUR Overnight Rate Swap (LU0290358497), Lyxor Euro Overnight Return (FR0010510800) and iShares EUR Ultrashort Bond (IE00BCRY6557). In addition, Mohr says other bond ETFs are also doing well this time around, with government bond trackers such as the Lyxor Euro Government Bond 10-15Y (LU1650489385), its 7-10 year counterpart (LU1287023185), and also for the Amundi US Treasury Bond 7-10Y (LU1407888137).
Gold ETCs in demand, crypto trackers strong in turnover
Further sought after: Gold ETCs, especially Xetra-Gold (DE000A0S9GB0), Puschmann also reported. "This is probably due to the increased gold price." The price for the troy ounce had climbed above US$2,000 on Friday for the first time since May, and is currently US$1,995.
According to Puschmann, crypto ETNs also recorded significantly higher turnover last week. "Now it's a bit calmer again." Bitcoin had climbed to $35,000 on speculation that a bitcoin spot ETF would soon be approved in the U.S. It is currently still at $34,000. The other cryptocurrencies are also benefiting. Bitcoin, Ethereum and Solana trackers would trade a lot on both sides. For the 21Shares Ripple (CH0454664043) and the VanEck Crypto Leaders (DE000A3GWEU3), a crypto basket, the trader sees more buying.
by: Anna-Maria Borse, 31 October 2023, © Deutsche Börse AG
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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