The abrupt change in trend on the stock markets has also led to a rethink in demand for investment funds. The previous high-flyers from the tech segment continue to be popular. But other segments are also coming into focus.
10 August 2023 FRANKFURT (Frankfurt Stock Exchange). In fund trading on the Frankfurt Stock Exchange, the question of central bank interest rate policy, which has long dominated the market, no longer plays a role for now. "The U.S. has reached the end of its rate hike cycle. It is not yet clear how long the key interest rates will remain at their increased level, but no one is interested in this at the moment," states Jan Duisberg of ICF Bank, who observes a "certain shrugging of the shoulders" among investors with regard to this question.
Systematic sales over several days
It should be noted that the universally feared interest rate hikes have by no means hurt the stock markets as much as many had assumed. In July, share prices around the world again rose sharply. But since the beginning of August, everything has suddenly changed. Although the situation has not changed dramatically, according to Duisberg, the European markets in particular have gone downhill. "We have clearly switched to risk-off mode, there was systematic selling over several days," reports the ICF trader.
Duisberg
Into high-yield dividend stocks
The situation was similar at Baader Bank. There, sales clearly predominated, especially at the beginning of the current correction phase. "Probably many stops were triggered," suspects Matthias Präger. Especially at the DWS Germany (DE0008490962) and the UBS Small Caps Germany (DE0009751651) there were increased sales. At the international level, stronger sales were seen in Quantex Global Value (LI0274481113) and CS Security Equity Fund B (LU0909471251).
On the other hand, the Schroder ISF European Dividend Maximiser (LU0321371998) and Fidelity's FF - Global Dividend Fund (LU0731782826) were on the buying list. When comparing these two dividend funds, the global approach has performed significantly better in recent years. On the other hand, the shares in the Europe fund currently have a much higher dividend yield of 6.8 percent.
Mixed funds are also in demand
Although technology funds such as BlackRock Global World Technology (LU0171310443) continue to be in demand, Duisberg sees a current trend toward "more breadth in the portfolio. In addition to the dividend focus, this is also reflected in the brisk turnover in the DKB Nachhaltigkeitsfonds Klimaschutz (LU0117118124), a "mixed fund with a label that is currently in vogue".
The Flossbach von Storch Multiple Opportunities (LU0952573482), where the fund manager can invest flexibly in the various asset classes via an active investment approach, continues to prove to be a perennial favorite with turnover on both sides. As of the end of July, however, around 70 percent of the lush fund volume was invested in equities.
Real estate equities vs. real estate funds:
ICF Bank also likes funds with real estate equities, such as Janus Henderson Horizon Pan European Property Equities (LU0088927925). Here the buyers are likely to bet on a turnaround after the relatively heavy price setbacks, especially in the previous year.
The situation is different for traditional real estate funds. "Here there is still pressure in the course of the current or still impending revaluation of many real estate portfolios," says Duisberg, who points to the increased interest rates, the fragile economic situation and the necessary energy renovations. "This leads to certain discounts."
For most funds, however, he now sees a balanced market. For example, with the briskly traded HausInvest (DE0009807016) or the Deka-ImmobilienEuropa (DE0009809566). In the case of UniImmo Europa (DE0009805515), he gives more sellers. In his experience, the interested parties that are also available can wait calmly for their chance because they will eventually be served by the sellers.
On the other hand, there is increasing interest in Leading Cities Invest (DE0006791825), which was quite illiquid for a long time and traded with high spreads. "This is showing a bit more liquidity and interest on both sides."
Money market funds sought as parking
Präger, meanwhile, still reports stronger-than-usual demand for money market funds. "Investors want to take advantage of the more attractive interest rates to park their money." Buying has been particularly strong in UniReserve: Euro (LU0055734320) and UBS Money Market (LU0006344922).
In the commodities/precious metals segment, there is relatively little activity. He sees scattered selling in the BGF World Mining Fund (LU0075056555) and Structured Solutions Next Generation Resources (LU0470205575).
by Thomas Koch, 10 August 2023 © Deutsche Börse AG
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and certified certificate advisor. Since the beginning of 2006, he has been covering events on the capital markets as a freelance journalist.
Feedback and questions to redaktion@deutsche-boerse.com
Koch