ETFs: "Much interest in ESG variants"

ESG variants of large indices are finding more and more fans. But they may also be more specialized, for example with a focus on marine resources or sustainable nutrition. In addition, the topic of artificial intelligence continues to gain traction.
 

16 May 2023. FRANKFURT (Börse Frankfurt). The buying mood continues - despite sideways movement on the stock markets. "With markets holding up well, we had about twice as many purchases as sales as turnover picked up," reports Holger Heinrich of Baader Bank. It was noticeable that ESG variants were preferred, also of the market-wide ETFs. Fabian Wörndl of Lang & Schwarz also reports a clear buyer overhang. "This applies to global, U.S. and European equities."

The DAX has been hovering around 15,800 points since mid-April, with 15,942 points at midday Tuesday. The S&P 500 has also been treading water for weeks. Only the Nasdaq 100 is still gaining. Tech stocks continued to benefit from speculation about the end of interest rate hikes.

ESG Leaders, Blue Economy - all in demand

Among European ETFs, products on the Euro Stoxx 50 are in demand, Heinrich notes, for example from Xtrackers, iShares or UBS (LU0380865021, DE0005933956, LU0136234068). Lyxor MSCI Europe ESG Leaders (LU1940199711), which tracks large- and mid-cap European companies with good ESG ratings, is also well received, he said.

ESG also plays a big role in global equities, with Heinrich reporting purchases for the CSIF MSCI World ESG Leaders Blue (<IE00BJBYDQ02>) and the BNP Paribas Easy ECPI Global ESG Blue Economy (LU2194447293). The latter provides access to 50 companies worldwide that are particularly committed to the sustainable use of marine resources. In view of the current dividend season, however, high-dividend stocks are also currently attracting investors. At Lang & Schwarz, for example, the iShares Stoxx Global Select Dividend 100 (DE000A0F5UH1) is doing well. It tracks 100 stocks with high dividend payouts from the Stoxx Global 1800 Index.

Small Caps: Before the race to catch up?

Among trackers of U.S. equities, small cap products are again in demand alongside large cap, as Heinrich also reports, such as the Amundi Russell 2000 (LU1681038672) and the iShares MSCI USA Small Cap ESG Enhanced (IE00B3VWM098). Small caps still lag large caps in terms of price performance: both ETFs are still in the red year-to-date, albeit only slightly. Over a three-year period, however, they can offer decent returns: the Amundi ETF has returned just under 13% per year, while the iShares ETF has returned 16% per year.

Focusing on AI with ETFs

In trading with sector and theme ETFs, US real estate trackers find many fans at Baader Bank. Another magnet: the topic of artificial intelligence and robotics, as Wörndl of Lang & Schwarz reports. He sees purchases, for example, for the Lyxor MSCI Robotics & AI (<LU1838002480>). Also sought after: the hydrogen theme with VanEck Hydrogen Economy (IE00BMDH1538).  

Heinrich also continues to register interest in the Deka MSCI Europe Climate Change ESG (DE000ETFL565). Rize Sustainable Future of Food (IE00BLRPQH31) is also in demand. This focuses on global companies that are active in the development and production of sustainable food and also meet ESG criteria.

Incidentally, this year - through the end of April - oil and gas, telecom and real estate ETFs have been the most popular among European sector ETFs, according to ETF analysis and trading house Crossflow. The highest outflows were recorded by the basic materials, healthcare and insurance sectors. With regard to US equities, the picture was different: Here, financials and IT stocks were the main draws, while healthcare and energy stocks flew out of portfolios. Read more: www.crossflow.de/wp-content/uploads/2023/05/2023_04_KnowtheFlow.pdf