The dip in March seems to have disappeared. ETF shares are being eagerly bought, and the mood regarding bank shares is also turning. Still on top: Coins of all kinds.
4 April 2023. FRANKFURT (Börse Frankfurt). Stock prices around the world continue to rise - the DAX has gained a good 4 percent in the past week to date and set a new high for the year, the MSCI World and Dow Jones are also up, and the Nasdaq 100 even slightly more. ETF trading is also buoyant again.
New month, new quarter, new luck?
Stock market trader Jan Duisberg is nevertheless amazed at how quickly prices are recovering. "You rarely see a V formation like this." Many would now be caught on the wrong foot, the fear of too strong commitment in the market is now giving way to the fear of missing out. "Especially before the Easter days with no trading, professional asset managers are afraid of not being there if things continue to go up."
Duisberg
Nevertheless: "Investors do not seem to trust the environment yet," estimates Holger Heinrich, who trades ETFs for Baader Bank. He reports 40 percent less volume compared to the previous week, but those who are active are more likely to be found on the buy side. Inflows outweighed the outflows by 20 percent.
Fabian Wörndl, who trades index trackers at Lang & Schwarz, also observes increased purchases in several ETFs, for example, the accumulating emerging markets classic iShares Core MSCI EM IMI USD (IE00BKM4GZ66). The MSCI World also generated sufficient demand, as usual especially for the ETF from iShares (IE00B4L5Y983). To general market situation here is certainly added that on Monday began not only a new month, but also the second quarter. Many savings plans are executed on such dates.
European and US equities remain generally in demand
Heinrich reports buying various blue-chip trackers of the Stoxx indexes Euro Stoxx 50 (FR0012740983), Europe 50 (DE0005933949) and Europe Large 200 (DE0005933980). Small caps would also be in demand, for example via the iShares Euro Stoxx Mid (IE00B02KXL92).
And, Heinrich adds, investors continue to be much more committed to European stocks than to U.S. stocks.
But even those are being bought. Heinrich notes demand for the top tier of U.S. stocks, buying, for example, the classic Dow Jones ETF from iShares (IE00B53L4350), an MSCI USA ETF from Amundi (LU1681042864), and a slightly stricter ESG variant, the iShares MSCI USA ESG Enhanced UCITS ETF (IE00BHZPJ890). Smaller U.S. companies are also sought after, he said, such as in the form of the SPDR S&P 400 US Mid Cap (IE00B4YBJ215) or the L&G Russell 2000 US Small Cap Quality (IE00B3CNHJ55).
Nasdaq has to catch up
U.S. technology stocks, as measured by the Nasdaq 100, had a record quarter in the first three months, with gains of a good 20 percent.
For investors, there is still room for improvement. Duisberg notes continued buying of the Invesco EQQQ Nasdaq-100 UCITS ETF (IE0032077012). "Here, you continue to see pent-up demand in tech stocks," he said. Played the theme simultaneously on the short side with a triple-leveraged ETN from WisdomTree (IE00BLRPRJ20).
Banks dominate
Trend reversal: Wörndl sees buying in the iShares S&P U.S. Banks ETF (IE00BD3V0B10), which tracks U.S. financial institutions.
Duisberg sees somewhat more exotic demand for an ETF tracking water companies, L&G Hydrogen Economy (IE00BMYDM794).
The most-traded ETF in March was the iShares EURO STOXX Banks 30-15 UCITS ETF, with turnover totaling €1.03 billion. By comparison, ETFs and ETPs traded for a total of €21.43 billion.
The specialist portal ETF Stream has analyzed the performance of various sectors in the first quarter: Unsurprisingly, banking ETFs were at the lower end, surrendering their gains only in March. At the top end, semiconductor ETFs romped alongside crypto trackers,
Commodities and cryptocurrencies to balance out
In commodity and precious metals securitizations, Wörndl reports buying gold. Xetra gold in particular is in high demand, he says (DE000A0S9GB0).
Duisberg expands the topic to include cryptocurrencies. Both gold and coins would have had a strong influx in the wake of the recent turmoil, and prices would have risen accordingly, holding up until now, despite the recovery in the stock market. For the trader, demand for a Ripple tracker from 21Shares (CH0454664043) and a Bitcoin tracker from VanEck (DE000A28M8D0) is noteworthy.
by: Edda Vogt, 4 April 2023, © Deutsche Börse