The war in Israel is also affecting the ETF market in this country. However, there is no sign of panic selling in trading. Instead, demand for commodity products is rising.
17 October 2023. FRANKFURT (Börse Frankfurt). Increasing concerns about an escalation of the armed conflicts in the Middle East are particularly evident in commodities. Leo Puschmann, who trades ETFs for Lang & Schwarz, reports brisk trading in oil products. Investors are currently focusing on ETCs with a leverage function, which are mostly used for short-term speculation.
Both the long and the short side are traded. As examples, the trader mentions the Brent Crude Oil 3x Daily Short (IE00BLRPRK35) and the WTI Crude Oil 3x Daily Leveraged (IE00BMTM6B32) from WisdomTree.
Gold and gold mining shares are bought
Jan Duisberg is also registering increased interest in the commodities segment among customers at the moment. At ICF Bank, however, this mostly revolves around gold. The players bet here with the help of the WisdomTree Physical Swiss Gold (JE00B588CD74) on rising prices in the precious metal. The fine ounce had recently gained more than seven percent within a few days, after an important chart support at a good 1,800 U.S. dollars had been successfully tested.
The trader also sees "a bit more turnover" in the VanEck Gold Miners (IE00BQQP9F84), which reflects the NYSE Arca Gold Bugs Index. This index includes the world's most important producers of gold and silver mines, such as Newmont Mining and Barrick Gold. The stocks had lost significantly more than the gold price in recent months, but were also able to recover at an above-average rate in recent days. This is a typical development, which is why investors often use gold mining stocks as a leveraged bet on changes in the precious metal.
Short-term allocations and ETF savings plans
In the equity markets, Duisberg reports "surprisingly quiet and overall balanced trading" in ETFs against the backdrop of sharp price swings. Occasionally, however, players have needed to act at the reduced price level, whether to limit losses or to make new purchases.
"Nice turnover" is seen by the trader, for example, in the Deka Euro Stoxx 50 ETF (DE000ETFL029) and the L&G Gerd Kommer Multifactor Equity (IE0001UQQ933), which remains in demand. Here, Gerd Kommer, the financial expert known as the "ETF Pope," attempts to achieve outperformance by modifying the composition of the world index.
At Société Générale, Frank Mohr reports a regularly occurring special effect at the start of the week. "In the middle of the month, there was again extremely strong activity from retail customers thanks to numerous ETF savings plans," says the trader. This primarily affected the large index ETFs. Examples include the MSCI World ETF from iShares (IE00B4L5Y983), the S&P 500 tracker from Vanguard (IE00B3XXRP09) and the iShares Core DAX ETF (DE0005933931).
But even before that, Mohr had been able to register somewhat higher turnover. "There is always a bit more activity coming in when volatility is rising," he said. In his view, however, these are mainly short-term allocations, because market players either reduce risks or take advantage of short-term opportunities when prices fall. Once again, there has been no sign of panic selling in recent days.
Normal business for crypto assets
Crypto assets have been comparatively stable recently. At ICF Bank, there are both purchases and sales in the briskly traded VanEck Ethereum ETN (DE000A3GPSP7) in this environment. The 21Shares Cardano ETP (CH1102728750) is also relatively busy, which traders say is particularly popular with risk-averse investors who like to speculate on price fluctuations in this segment.
Among the clientele of Lang & Schwarz, meanwhile, the 21Shares Bitcoin ETP (CH0454664001) is the main focus. Here, too, the traders report a largely balanced ratio between purchases and sales in a "normal business". On the other hand, there is sustained buying in the EUR Overnight Rate ETF (LU0290358497) from Xtrackers, which is often purchased as a substitute for overnight money.
By Thomas Koch, 17 October 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.
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