What is predominantly rising in the overall market at the moment is bought in ETF trading: Global
equities, tech stocks, cryptos and energy stocks. The DAX is partly sold despite the rally.
17 January 2023. Frankfurt (Börse Frankfurt). The positive continuation of an above-average start to the year lifts sentiment in ETF trading. "Turnover and sentiment are good," reports Fabian Wörndl of Lang & Schwarz. What is being bought is what rises. "But we are also noticing healthy skepticism." The issues of the previous year - such as inflation and the threat of recession - are not off the table.
Frank Mohr of Société Générale also reported very good turnover, although it did not reach turnovers of the first week of trading, when a lot of fresh money had come into the market. "Nevertheless, we continue to have a slight buying surplas with a strong focus on equity ETFs." They accounted for 71 percent of turnover.
"With good turnover, people are investing more broadly than they did last year," reports Jan Duisberg of ICF Bank from the Frankfurt trading floor. After the stock exchanges kicked off the year 2023, the tendency to consolidate is almost at zero, he said. "Investors are buying, we are registering more orders than usual, and here and there more exotic, riskier products are also being bought."
"The further rising markets have also been reflected again in our turnovers. We had almost 80 percent more purchases than sales," Holger Heinrich from Baader Bank looks at the current events in ETF trading.
Global as well as domestic equity tracker
Initially, the favorites of year-end 2022 - global and US equities - will continue to be bought. Wörndl reports investments in global index trackers. Here, especially such as the Vanguard FTSE All-World High Dividend Yield (IE00B8GKDB10) are preferred. According to Mohr, global equity ETFs are also predominantly bought, such as the iShares Core MSCI World (IE00B4L5Y983) and the Shares Edge MSCI World Value Factor (IE00BP3QZB59). "Value is bought," Mohr explains.
At Baader Bank, global investments (IE00BMCZLJ20) and investments with a focus on the U.S. are being executed almost exclusively in the low-volatility variants.
By contrast, despite the above-average positive performance since the beginning of the year, the DAX is being sold by the clients of Sociéte Générale. "We have a slight sales surplus here," reports Mohr. The sell lists include accordingly include the Shares Core DAX (DE0005933931).
However, according to Mohr, German equity trackers are being traded significantly more than usually. "Instead of 4 to 5 percent of sales as in the past, we have 9 to 10 here at the moment." That is exceptional, he said.
Mohr
Sustainability is in demand
At ICF Bank, on the other hand, the DAX (DE000ETFL011) is sought after. Also the S&P 500 (IE00B3YCGJ38) reaches an exceptionally high number of buyers. At Baader, in contrast to the previous week, European ETFs are in the focus of investors. "Here, investments are made in a wide range," notes Heinrich. It extends from small companies (LU1598689153), large and medium-sized stock indices with sustainable components (IE00BNC1G699) to quality ETFs and low-volatility ETFs (LU1215454460). "Sustainable products are also back in demand," adds Heinrich. Among the multitude of these products, the most popular are the Deka MSCI Germany Climate Change ESG (DE000ETFL540) and the HSBC MSCI Europe Climate Paris Aligned (IE00BP2C0316).
Emerging markets remain theme
Meanwhile, interest in emerging markets is not waning. At Société Générale, the Lyxor MSCI Emerging Markets (<LU0635178014>) is favored. "Smaller investments continue," Mohr reports.
The fact that people are not blindly buying into the market, but that a healthy skepticism prevails, is also evident in WisdomTree S&P 500 VIX Short-Term Futures 2.25x Daily Leveraged (IE00BLRPRH06).
Technology, financials, energy and gold miners bought
Investors are taking advantage of the recovery in technology stocks to make corresponding investments. At Lang & Schwarz, the iShares S&P 500 Information Technology Sector (IE00B3WJKG14) is added to the portfolios. Duisberg reports purchases of the L&G Artificial Intelligence (IE00BK5BCD43). In addition, L&G Hydrogen Energy (IE00BMYDM794) is taken into account. "A drop of about 35 percent since the issue two years ago is apparently used here to enter," Duisberg explains. Overall, he notes more demand for more specialized, exotic products.
Duisberg
At Société Générale cyber security (IE00BLPK3577) and renewable energies (IE00BK5BCH80) are dominating topics. Overall, the financial sector according to Mohr is the strongest, accounting for 16 percent of sector sales. Mohr reports purchases of the Lyxor STOXX Europe 600 Insurance (LU1834987973) and the iShares STOXX Europe 600 Banks (DE000A0F5UJ7). Also showing strong sales are ETFs covering the energy sector (IE00BJ5JP105) and commodities (IE00B6R52036). Here are mainly companies high up the ranking that explore and mine gold and other precious metals.
Commodities retain investors' attention
The rise in oil and gas prices is also generating good sales of the corresponding ETCs: at Lang & Schwarz, however, trading is dominated by a short product, the WisdomTree Natural Gas 3x Daily Short (IE00B76BRD76).
Cryptos are bought - Solana ETP particularly in demand
As prices rise, old acquaintances are also coming back into the spotlight, such as Cryptocurrencies. At Lang & Schwarz, Bitcoin (DE000A27Z304) and coins such as Ethereum are popular purchases. Duisberg's clients* are also betting on Ethereum (CH0454664027) and VanEck Bitcoin (DE000A28M8D0), albeit with different ETPs. In addition, according to Wörndl interest in Solana stands out in particular. The price increase of about two-thirds - 65 percent - within a week was followed by purchases of the VanEck Solana ETN (DE000A3GSUD3).
Bonds: Many new issues - focus on companies
There have been many new issues in the bond market since the beginning of the year. "These have met with brisk demand," reports Mohr. Nevertheless, trading in bond ETFs has been cautiously positive. Corporate bonds dominate bond trading. Shorter maturities of European securities (LU1437018168) remain most in demand. Debt securities of large European companies (IE0032523478) are also gaining interest.
Equities | |
World | Buy |
Germany | Buy and Sell |
Sectors | |
Technology | Buy |
Finances | Buy |
Energy | Buy |
Themes | |
Cyber Security | Buy |
Artificial Intelligence | Buy |
Renewable energies/ hydrogen | Buy |
Sustainability | Buy |
Cryptos | Buy |
Fixed Income | |
Corporate Bonds Europe Large Corporates | Buy |
European Corporate bonds short maturity | Buy |
from: Antje Erhard, 17 January 2023, © Deutsche Börse AG
Antje Erhard is a journalist and presenter specializing in the stock market, business and finance.
Feedback and questions to redaktion@deutsche-boerse.com.
Erhard