Those looking for something more specific like to bet on tech stocks or more concrete themes such as batteries and artificial intelligence. A new trend: there are more and more active ETFs.
26 September 2023. FRANKFURT (Börse Frankfurt). The mood on the stock exchanges is depressed, but there is no sign of a wave of selling on the ETF market. "Trading is quiet and without a clear trend," reports Ivo Orlemann from ICF Bank. Leo Puschmann from Lang & Schwarz also reports buying and selling in equal measure, Frank Mohr from Société Générale even a clear buying overhang.
The interest is mainly in global and US equities, as Mohr notes. On the shopping lists are, for example, MSCI World ETFs from iShares (IE00B4L5Y983) and S&P 500 trackers from SPDR (IE00B6YX5C33) or Vanguard (IE00B3XXRP09). ETFs with access to European equities were more likely to be sold. The iShares Core DAX was again popular (DE0005933931). The German benchmark index has recently lost a lot of ground: At noon on Tuesday, the DAX is only at 15,340 points, compared to almost 15,900 points in mid-September and 16,524 points at the end of July.
The interest is mainly in global and US equities, as Mohr notes. On the shopping lists are, for example, MSCI World ETFs from iShares (IE00B4L5Y983) and S&P 500 trackers from SPDR (IE00B6YX5C33) or Vanguard (IE00B3XXRP09). ETFs with access to European equities were more likely to be sold. The iShares Core DAX was again popular (DE0005933931). The German benchmark index has recently lost a lot of ground: At noon on Tuesday, the DAX is only at 15,340 points, compared to almost 15,900 points in mid-September and 16,524 points at the end of July.
Cathie Woods enters Europe
A bang for the buck in Europe's ETF industry: the specialised London-based ETF issuer Rize ETF is being taken over by ARK Invest, the investment company of the well-known US investor Cathie Wood. This means that ARK Invest now has a foothold in Europe for the first time. Wood stands for high-risk investments in disruptive technologies such as AI, robotics and e-mobility. Especially at the beginning of the Corona pandemic, her flagship fund "Ark Innovation ETF" was extremely successful. In the course of the takeover, Rize ETFs are to be gradually transferred to the ARK Invest Europe brand. However, Rize's specialisation in thematic and sustainable products is to be retained. There are currently 11 Rize ETFs on Xetra, almost all of them on unusual themes such as Sustainable Future of Food, medical cannabis, circular economy or pet supplies.
Battery ETF up 22 per cent for the year
In the sector ETF business, technology trackers are once again scoring points. "They are always popular," notes Puschmann from Lang & Schwarz. Always in demand at ICF: the L&G Battery Value Chain (IE00BF0M2Z96). It tracks companies along the entire battery production supply chain, from raw material extraction to development. Over a three-year period, the share price has risen by 22% per year. Clients of Société Générale like to invest in companies from the field of artificial intelligence, such as Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51) and WisdomTree Artificial Intelligence (IE00BDVPNG13). After all, they are up 17 per cent over three years and 11 per cent a year. Also sought after: energy ETFs (IE00BM67HM91). On the other hand, real estate ETFs such as the iShares Developed Markets Property Yield (IE00B1FZS350) are being sold off.
Favourites in the bond ETF segment continue to be money market and near-money market trackers, Mohr reports, specifically the Lyxor Euro Overnight Return (FR0010510800), the iShares EUR Ultrashort Bond (IE00BCRY6557) and the Xtrackers II EUR Overnight Rate Swap (LU0290358497).
Active ETFs: From niche to game changer?
The market for active ETFs is growing strongly and will continue to grow strongly, that is the result of a study by Scope Fund Analysis. Unlike in the USA, these special ETFs are still a niche product in Europe. According to the study, around 26 billion euros were invested in the products distributed in Germany at the end of June 2023. By comparison, almost 1.2 trillion euros are invested in the total of over 2,000 ETFs traded on Xetra. "But the segment is growing strongly on both the product and provider side - not least because investors are increasingly recognising that the ETF shell is also suitable for actively managed strategies," Scope writes. Valuations are still difficult as most active ETFs are still young, he adds. "However, after a track record of at least three, preferably five years has been established, active ETFs could become very interesting in the future, especially for institutional clients and private self-deciders." The reason: the chance of additional returns with low costs at the same time. According to Scope, active ETFs could become the game changer in the ongoing active-passive debate. In contrast to the classic, purely passive variants, active ETFs do not simply follow an index. Rather, they are actively managed by a fund manager or they track a specially developed index. Important providers are JP Morgan and Fidelity, but also Pimco, Ossiam and VanEck.
by: Anna-Maria Borse, 26 September 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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