ETFs: In search of quality
U.S. equities remain the big seller, often selected on the basis of quality or value, i.e. quality and (under)valuation. After strong price gains, investors are now exiting oil and gas stocks.
October 12, 2021. FRANKFURT (Frankfurt Stock Exchange). The nervousness on the stock market continues. Still the DAX holds above the mark of 15,000 points, on Tuesday morning it is 15,150 points. Last week, the index had briefly fallen below 14,900 points. ETF traders report nevertheless predominantly inflows in equity ETFs. "Unlike the previous week, purchases dominate again," reports Christian Dürr of Société Générale. Hubert Heuclin of BNP Paribas also sees clear net inflows into equity ETFs.
Quality and value stocks sought from the USA
The focus continues to be on the USA. According to Heuclin, the iShares Core S&P 500 (IE00B5BMR087) is by far the most popular, but MSCI USA Quality ETFs (IE00BD1F4L37) are also popular. According to Dürr, investors are specifically focusing on U.S. value stocks, specifically with the UBS MSCI USA Value (IE00B78JSG98).
Torben Bendt of Lang & Schwarz reports high turnover in MSCI World ETFs. "That's where many are getting back in after the setback." According to Heuclin, MSCI World ETFs are seeing smaller inflows compared to S&P index funds (IE00B4L5Y983), as are Japanese equities (LU0659580079). Société Générale clients are also positioning themselves in Japanese stocks. "After all, the Nikkei had fallen sharply recently," notes Dürr.
Heuclin
Hardly any interest in Europe shares
European equities do not play a major role at present. At Lang & Schwarz, there is a lot going on at best in short products on the DAX, also with leverage. Examples are the Xtrackers ShortDAX Daily Swap (LU0292106241) and the Xtrackers ShortDAX x2 Daily Swap (LU0411075020).
According to Dürr, emerging markets equities are seeing high turnover in both directions, such as with the iShares Core MSCI EM (IE00BKM4GZ66).
Profit-taking in oil stocks
As far as sector ETFs are concerned, according to Dürr, most of the activity continues to revolve around technology, energy and financial stocks. While technology stocks were predominantly bought, sellers now had the upper hand in energy stocks. Apparently, profits are being taken: ETFs such as the Lyxor Stoxx Europe 600 Oil & Gas (LU1834988278) have gained 24 percent since the beginning of the year - driven by the oil price increase from 51 U.S. dollars at the beginning of the year to currently almost 84 U.S. dollars for a barrel of Brent.
Financial stocks are seeing inflows. "Banks are Europe's top performer in 2021 and, as a traditional beneficiary of higher interest rates, one of only four sectors with price gains last month," notes Heuclin.
Lang & Schwarz clients also like to bet on iShares Global Water (IE00B1TXK627).
Bonds? Only with inflation protection
Investors don't want to know about most bond ETFs at the moment, with Heuclin reporting net outflows from all categories - the exception being inflation-linked bonds. Concerned about rising consumer prices, investors backed the iShares EUR Inflation Linked Govt Bond (IE00B0M62X26) and the Lyxor EUR 2-10Y Inflation Expectations (LU1390062245), for example. Dürr also reports purchases of inflation-linked bonds, particularly the Lyxor ETF. "Inflation is just on everyone's lips".
Crypto ETNs: Solana and Cardano in Focus
Cryptocurrency ETNs continue to show high turnover. Bendt sees a lot of buying interest for the VanEck Vectors Solana (DE000A3GSUD3) as well as Cardano ETNs.
However, bitcoin and ethereum ETNs continue to see the highest turnover, specifically BTCetc - ETC Group Physical Bitcoin (DE000A27Z304), VanEck Vectors Ethereum (DE000A3GPSP7) and WisdomTree Bitcoin (<GB00BJYDH287<). Bitcoin has long since recovered from its recent setback and is now back at $56,778.
| Equities | |
| USA | Buys |
| Value, Quality | Buys |
| World | Buys |
| Japan | Buys |
| Industries | |
| Technologie | Buys |
| Oil und Gas | Sales |
| Banks | Buys |
| Bonds | |
| Inflation-protected | Buys |
| Kryptocurrency-ETNs | Buys |
by Anna-Maria Borse, 12. Oktober 2021 © Deutsche Börse
Deutsche Börse 
