More and more ETF investors want to invest sustainably: Soon half of new money will flow into ESG ETFs. In addition, investors are also interested in the commodity boom and cryptocurrencies.
2 November 2021. Frankfurt (Börse Frankfurt). At the World Climate Conference in Glasgow, politicians are struggling to reach an agreement in the fight against climate change - in the ETF world, the topic of energy transition has long been high on the agenda. ESG ETFs accounted for €44 billion of the €92 billion in new money flowing into European-registered equity ETFs in the first nine months of this year, Amundi reports. "Investors continued to switch from traditional to ESG ETFs," the issuer said. Inflows into ESG bond indexes totaled 14 billion euros, representing 46 percent of total inflows.
Climate-related ETFs are also moving higher on Börse Frankfurt's turnover list. For example, the iShares MSCI USA SRI (IE00BYVJRR92) was among the top-selling ETFs in the past five trading days - alongside the classic DAX, MSCI World, S&P 500 and Euro Stoxx trackers. This only tracks companies from the MSCI World that perform particularly well in terms of environmental protection, social responsibility and corporate governance compared with their sector peers.
Clean energy ETFs recovering
A lot is also changing hands in S&P Global Clean Energy ETFs. Investors who bet on these ETFs suffered for a long time this year: The price had fallen sharply after soaring in 2020. Now it has bounced back. The iShares Global Clean Energy (IE00B1XNHC34) is still down since the beginning of the year. Over three years, however, it is up a respectable 46 percent for the year. The largest positions in the index are the US solar technology company Enphase Energy, the US fuel cell manufacturer Plug Power, SolarEdge from Israel and the Danish wind power companies Vestas Wind Systems and Orsted.
Water ETFs such as Lyxor MSCI Water ESG Filtered (FR0010527275) and iShares Global Water (IE00B1TXK627) are also very popular again at the moment. "That's where we see buying in a big way," notes Andreas Schröer of Lang & Schwarz. Both ETFs have swung back to their uptrends after a small setback in September. The Lyxor ETF is up 29 percent year-to-date, while the iShares ETF is up 34 percent.
High commodity prices, high turnover
Meanwhile, the extreme rise in commodity prices is also luring investors into commodity products such as the Market Access Jim Rogers International Commodity Index ETF (LU0249326488). "Commodities are the really big theme right now," Schröer notes. The ETF tracks the performance of the Rogers International Commodity Index, a U.S. dollar-denominated basket of commodities. The year-to-date return is 52 percent.
However, the highest-turnover sector ETFs on the Frankfurt Stock Exchange are currently the iShares Euro Stoxx Banks 30-15 (DE0006289309), the iShares Stoxx Europe 600 Automobiles & Parts (DE000A0Q4R28) and the iShares S&P 500 Information Technology (IE00B3WJKG14).
Cryptocurrencies: Solana and Cardano in focus
Crypto ETNs also remain high in investors' favor. "A lot of our money is currently going into Solana and Cardano ETNs," Schröer explains, referring to 21Shares Solana (CH1114873776) and 21Shares Cardano (CH1102728750). Bitcoin had marked a new all-time high of $66,894 in October, currently down slightly at $62,853.
Morningstar names flagship climate ETFs.
By the end of 2019, the EU had adopted new regulation and created two new types of climate benchmarks: the EU Climate Transition Benchmark ("EU CTB") and the EU Paris Aligned Benchmark ("EU PAB"). For the PAB, securities are selected to match greenhouse gas emissions with Paris climate targets; for the CTB, securities are selected to meet the minimum requirements of European regulators. As Morningstar writes in a recent evaluation, there are about 30 European index funds and ETFs that track EU CTB or EU PAB. Morningstar now awarded the "low carbon designation" to ten of them. This is intended for funds that are characterized by low CO2 risk and little exposure to fossil fuels.
Amundi MSCI World Climate Transition CTB | LU1602144229 |
Amundi MSCI Europe Climate Paris Aligned PAB | LU2182388319 |
BNP Paribas Easy Low Carbon 100 Europe PAB | LU1377382368 |
Franklin S&P 500 Paris Aligned Climate | IE00BMDPBZ72 |
Franklin Stoxx Europe 600 Paris Aligned Climate | IE00BMDPBY65 |
Lyxor Net Zero 2050 S&P Eurozone Climate PAB | LU2195226068 |
Lyxor Net Zero 2050 S&P 500 Climate PAB | LU2198883410 |
Lyxor Net Zero 2050 S&P World Climate PAB | LU2198882362 |
Lyxor Net Zero 2050 S&P Europe Climate PAB | LU2198884491 |
Lyxor MSCI Europe ESG Climate Transition CTB | LU2056738490 |
by Anna-Maria Borse, 2 November 2021, © Deutsche Börse AG