ETFs: volatile markets, strong trends
Rising inflation, ongoing war in Ukraine and upcoming interest rate decisions by the U.S. Federal Reserve keep volatility on the stock markets very high. Global equity trackers and commodity investments dominate ETF trading.
March 15, 2022 Frankfurt (Frankfurt Stock Exchange). Hopes of progress in negotiations between Russia and Ukraine drove Europe's stock markets at the start of the week. The DAX temporarily overcame the 14,000 mark. New York did not follow the development. In China, share prices virtually collapsed: Corona lockdowns are fueling fears of weak economic development in the Middle Kingdom.
Meanwhile, the mood of financial market participants plummeted. The ZEW index of economic expectations falls from 54.3 to -39.3 points in March, while the situation deteriorates from -8.1 to -21.4 points - both values are lower than expected. "The ECB's job is not getting any easier with the darkening economic outlook, as it is under pressure to move away from its expansionary monetary policy due to very high inflation," comments Ulrich Wortberg of Helaba on the slump in sentiment.
By contrast, Wednesday's meeting of the U.S. Federal Reserve is being viewed with comparative composure. A first interest rate hike of 25 basis points is considered certain. "But that would only be a drop in the bucket," comments Fabian Wörndl of Lang & Schwarz. Much more would have to happen, as oil prices and inflation were already high before the start of the war in Ukraine.
ETF trading: global, US tech with and without leverage, China
In ETF trading, demand for global equity trackers dominates: "In the MSCI World ETFs, every setback is immediately used to buy," says Wörndl, describing investor behavior.
Hubert Heuclin of BNP Paribas registers purchases of U.S. stocks with broad diversification among his clients in the form of the Xtrackers S&P 500 Swap (LU0490618542).
In Wörndl's order books, U.S. tech stocks are sold with the Invesco Nasdaq-100 Swap (IE00BNRQM384). In leveraged NASDAQ ETNs, he reports inflows and outflows. For example, WisdomTree NASDAQ 100 3x Daily Leveraged (IE00BLRPRL42) and its short counterpart, WisdomTree NASDAQ 100 3x Daily Short (IE00BLRPRJ20) are trading briskly, he says: "Investors are quick to bet on even small moves here."
The lockdown in China and concerns about the consequences are being met with selling in iShares China Large Cap (IE00B02KXK85), Wörndl reports.
Heuclin, meanwhile, notes the largest inflows into eurozone equities with the iShares Core EURO STOXX 50 (IE0008471009). And in trackers of Swiss equities Amundi Msci Switzerland (LU1681044993).
Translated with www.DeepL.com/Translator (free version)
Easing in oil prices: Energy stocks soften
As in the previous week, commodity ETFs are among the products in demand. Meanwhile, the negotiations between the warring parties and the expectations associated with them are easing oil prices. "Energy stocks are softening along with crude oil prices and could fall further if investors shift their recent gains into underperforming sectors such as technology," explains Heuclin.
Heuclin
"Depending on how oil prices develop, a lot is bought and sold again," summarizes Wörndl. The Xtrackers MSCI World Energy UE 1C (IE00BM67HM91) is a particular focus for investors at Lang & Schwarz. The discussion about an import ban on Russian energy had driven the price of North Sea Brent to more than 130 U.S. dollars per barrel. In the meantime, Brent is trading significantly lower by 100 U.S. dollars.
Woerndl's investors responded to the rise in the gold price by buying the iShares Gold Producers (IE00B6R52036). The sector ETF with producers has gained a good 10 percent over the month. Industrial metals are also sought after by Wörndl.
Sectors: Banks out of portfolios
Heuclin reports buying in the renewable energy sector ETF, iShares Global Clean Energy (IE00B1XNHC34).
Otherwise, he registers mostly outflows from bank ETFs. They had gained significantly in value in anticipation of rising interest rates in recent weeks. Now they are on the sell lists: the Lyxor STOXX Europe 600 Banks (LU1834983477) has lost a good 15 percent of its value within a month. In particular, institutions with comparatively large credit exposures in Russia have seen their share prices plummet since the start of the war, after the EU and other countries excluded Russian banks from the international financial communications system SWIFT. However, this also caused uncertainty in the financial sector because of the possible threat of payment defaults on Russian loans.
At Lang & Schwarz, the situation is similar: Bank ETFs are sold, but also technology ETFs.
In contrast, trading in crypto-trackers is comparatively listless: ETNs on almost all cryptocurrencies are traded below average: "After the sales of the past weeks, it is quite quiet here," summarizes Wörndl with regard to the turnover.
Bonds: government and corporate stocks on sell lists
With the talks between Russia and Ukraine, risk appetite has risen again, which is why government bond prices fell significantly. "With the surprisingly clear stance of the ECB on the exit from the purchase programs as well as speculation about joint debt in the EU, there are currently further yield drivers," predicts Burghard Fehling from Commerzbank.
While government and corporate bonds declined in almost all regions, Heuclin noted brisk demand for inflation-protected products. BNP Paribas clients*, for example, mainly bought the Lyxor EUR 2-10Y Inflation Expectations ETF (LU1390062245) and the iShares EUR Inflation Linked Govt Bond UCITS ETF (IE00B0M62X26) as well as the Lyxor US$ 10Y Inflation Expectations ETF (LU1390062831).
| Shares | |
| USA | Sales |
| World | Sales and Buys |
| Europe | Sales and Buys |
| Emerging Markets | Sales |
| Industries | |
| Energy | Sales |
| Finance | Sales |
| Technology | Buys |
| Fixed Income | |
| Government bonds | Sales |
| Corporate Bonds | Sales |
| Inflation protected bonds | Buys |
by Anna-Maria Borse 15 March 2022, © Deutsche Börse AG
Deutsche Börse 
