While USA and MSCI World ETFs continue to do well, DAX trackers are on the down lists. Money market ETFs continue to be extremely sought after. The new concerns about China and its real estate market have so far had no impact on ETF trading.
15 August 2023. FRANKFURT (Börse Frankfurt). The imminent distress of China's real estate developer Country Garden is causing nervousness in the markets. In addition, disappointing figures for China's retail sales and industrial production in July will be released this Tuesday morning. The DAX stands at noon at only 15,730 points, more than 700 points below the recent record high of late July. But so far, that hasn't had an impact on ETF trading. "We are not seeing higher turnover in MSCI China or real estate ETFs," reports Frank Mohr of Société Générale.
Trading in traditional ETFs is quiet due to the vacations. Heinrich Holger of Baader Bank reports declining turnover, but significantly more purchases than sales. Mohr also sees mainly purchases, with very low trading volume. S&P 500 trackers, such as those from iShares, Invesco or Lyxor/Amundi, often ended up in the portfolios. According to Heinrich, the focus is again on the broad indexes (IE00BMTX1Y45), including in sustainability variants such as the Franklin S&P 500 Paris Aligned Climate (IE00BMDPBZ72).
Many fans of Paris Aligned, ESG, SRI ETFs.
"There has been some restraint in internationally investing ETFs," notes Heinrich. "Here, the focus has been on Fidelity Global Quality Income (IE00BYXVGZ48) and ESG products such as HSBC MSCI World Climate Paris Aligned (IE00BP2C1V62) and CSIF MSCI World ESG Leaders Blue (IE00BKKFT300)." Mohr sees a lot of interest in the iShares Core MSCI World (IE00B4L5Y983).
European equities also tend to be in demand, with bets on MSCI Europe, Stoxx Europe 600 and Euro Stoxx 50 trackers (IE00B5BD5K76, LU1772333404, IE0008471009), but also partly on products that explicitly exclude UK equities (IE00B14X4N27), according to Heinrich. Also sought after: the Fidelity Europe Quality Income (IE00BYSX4176). Only DAX ETFs are on the sell lists, Mohr notes, such as the iShares Core DAX (DE0005933931).
Mohr
Real estate ETFs: Price drop due to interest rate hike
As for sector ETFs, Andreas Schröer of Lang & Schwarz reports "a lot of buying" for the iShares S&P 500 Information Technology (IE00B3WJKG14). Mohr, on the other hand, sees outflows tending to technology stocks, such as with the Lyxor MSCI World Information Technology (LU0533033667) or its counterpart from Xtrackers (IE00BM67HT60). He also reports outflows for healthcare stocks (LU0533033238). In contrast, the Xtrackers Artificial Intelligence & Big Data AI ETF (IE00BGV5VN51) remains popular, he says. It is up more than 40 percent this year.
Meanwhile, the sharp rise in interest rates has hurt real estate ETFs. The three largest real estate ETFs on Xetra, iShares Developed Markets Property Yield (IE00B1FZS350), iShares European Property Yield (IE00B0M63284) and Xtrackers FTSE Developed Europe Real Estate (LU0489337690), are down 20 percent, 24 percent and 26 percent respectively since August 2022. "On balance, however, real estate ETFs have seen inflows over the past 12 months," Mohr reports. The only exceptions, he said, were products with access to Asian real estate companies.
Brisk demand for money market ETFs
Bond ETF trading continues to revolve around money market and near-money market products. "Xtrackers II EUR Overnight Rate Swap (LU0290358497) is very popular," explains Schröer of Lang & Schwarz. Mohr also observes persistently high inflows into money market trackers such as Lyxor Euro Overnight Return (FR0010510800).
In July, money market and near-money market ETFs were also top sellers on Xetra. Four of them were among the top five bond ETFs in terms of turnover. In addition to the Xtrackers II Euro Overnight Rate Swap, these are the iShares eb.rexx Government Germany 0-1yr (DE000A0Q4RZ9), the iShares EUR Ultrashort Bond (IE00BCRY6557) and the Deka Deutsche Boerse EUROGOV Germany Money Market (DE000ETFL227).
Apart from that, the BNP Paribas Easy JPM ESG EMU Government Bond IG 3-5Y (LU2244387457), the iShares EUR High Yield Corp Bond (IE00B66F4759) and the Lyxor Green Bond (LU1563454310) are currently in demand at Société Générale. The latter offers access to euro- or U.S. dollar-denominated investment-grade bonds issued by sovereigns, multinationals or development banks that have been classified as sustainable by index provider Solactive.
Equities |
|
USA | Purchases |
World | Purchases |
Europe | Purchases |
Germany | Sales |
| |
Industries/Topics |
|
Technology | Purchases/Sales |
Artificial intelligence | Purchases |
| |
Bonds | |
Money market | Purchases |
by Anna-Maria Borse, 15 August 2023, © Deutsche Börse AG
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