In the run-up to the upcoming marathon of central bank meetings (U.S., eurozone, China and Japan), active market participants are largely relaxed. Most seem to be betting that the trends of the past weeks and months will continue. Therefore, technology ETFs are the main focus of buyers.
13 June 2023. FRANKFURT (Börse Frankfurt). The prices of the major stock indices have developed predominantly positively in recent days. One reason for this could be sentiment. Jan Duisberg, trader at ICF Bank, refers to the still quite high skepticism that prevails around the stock exchange floor: "For many market observers, the stock markets are developing surprisingly positively". First and foremost, the high-tech index Nasdaq 100 should be mentioned here. Since the beginning of the year, it has risen by 33 percent, making it the absolute top performer.
ETFs on the Nasdasq 100 as a perennial favorite
The continuing strong momentum almost automatically attracts new capital. Current statistics from Deutsche Bank show that by far the most money has been invested in the technology sector in recent weeks, while at the same time there have been massive outflows in the energy sector. "ETFs on the Nasdaq 100 are a perennial favorite," Duisberg confirms. He observes continued strong buying, for example, in the Invesco EQQQ Nasdaq-100 UCITS ETF (IE0032077012) and the Lyxor Nasdaq-100 UCITS ETF (LU2197908721).
The market-wide tech index is also very popular among investors* who are very risk-averse. Fabian Wörndl, who trades ETFs for Lang & Schwarz, reports "busy buying" in triple-leveraged Nasdaq ETNs such as the WisdomTree Nasdaq 3x Daily Leveraged (IE00BLRPRL42). Occasionally, there are also exposures to the counterpart, the WisdomTree NASDAQ 100 3x Daily Short (IE00BLRPRJ20). Its price rises when the Nasdaq index loses value. Here, after the strong rise, either a correction is deliberately set or the portfolio is hedged against price declines.
Duisberg
Tech specialties also remain in demand
In addition to the mainstream index, however, products with an even clearer specialization are also in focus in the tech sector. Duisberg highlights the L&G Battery Value-Chain UCITS ETF (IE00BF0M2Z96) here. The corresponding index includes shares of companies involved in the development and production of batteries. This is a topic that has recently been played out more and more frequently in view of the energy turnaround being pushed by politicians. Among Lang & Schwarz's clientele, the ESG-filtered Xtrackers Artificial Intelligence & Big Data UCITS ETF 1C (IE00BGV5VN51) and the iShares Digital Security UCITS ETF (IE00BG0J4C88) are currently high on the shopping list. Artificial intelligence and protecting computer systems and networks from malicious attacks have long been among the most sought-after potential future trends on the stock markets.
Even away from the technology sector, ETF specialists are seeing mostly buying. Products on broad equity indices such as the Deka MSCI World UCITS ETF (DE000ETFL508) are almost traditionally actively traded. Duisberg also reports strong interest in the Deka Oekom Euro Nachhaltigkeit UCITS ETF (DE000ETFL474). Here, the stocks in the index are selected according to social and environmental criteria. "ETFs with sustainability labels are selling well," says the ICF Bank specialist, explaining the background. The thesis is supported by the equally strong demand for the Deka MSCI USA Climate Change ESG UCITS ETF (DE000ETFL573), where the weighting of the components based on the MSCI USA Index is also based on ESG criteria.
Popular Xetra Gold and Little Trading in Crypto ETNs
At Lang & Schwarz, Wörndl also reports heavy trading in the iShares Core MSCI EM IMI UCITS ETF USD (IE00BKM4GZ66). Through such vehicles, investors* can profit from price increases in emerging market equities. Analysts see increasingly good opportunities here. Among investments in commodity and precious metal securitizations, Wörndl highlights Xetra-Gold (DE000A0S9GB0). In the case of crypto ETNs, meanwhile, buying and selling are currently in balance with manageable trading.
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by: Thomas Koch, 13 June 2023, © Deutsche Börse
Thomas Koch is a CEFA investment analyst, investment specialist for structured products (ISSP) and certified certificate advisor (EDA). Since the beginning of 2006, he has been dealing with events on the capital markets as a freelance journalist.
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Koch