ETFs: "U.S. equities as drivers"

As far as European equities are concerned, according to Heuclin, at best the sustainability variants of the major indexes are popular, such as the iShares MSCI Europe ESG Screened (IE00BFNM3D14) and the BNP Paribas Easy MSCI Europe SRI S-Series PAB 5% Capped (LU1753045415). Classic Euro Stoxx 50 ETFs (FR0007054358), on the other hand, are flying out of portfolios. Investors apparently don't want to know much about DAX trackers either at the moment: Mohr reports sales from the iShares Core DAX (DE0005933931).

Brave buy China's shares

First easing in China and somewhat better than expected purchasing managers data let investors*innen also grab again for Chinese shares. Torben Bendt of Lang & Schwarz is registering strong interest in the iShares MSCI China (IE00BQT3WG13). It has recently recovered somewhat, but is still down 17 percent since the beginning of the year.

According to Heuclin, value stocks are also doing well - as in previous weeks - for example with the Xtrackers MSCI World Value (IE00BL25JM42). Value stocks are currently proving to be an anchor of stability in portfolios, with Xtrackers MSCI World Value up 2 percent year-to-date, while the market-wide Xtrackers MSCI World is down 7.8 percent.

"A lot of it is about oil"

As for sector ETFs, the primary sectors of interest at the moment are basic materials, healthcare and energy. "The otherwise high-turnover technology stocks are 'under the radar,'" Mohr notes. Basic materials ETFs are dominated by sales, such as in Lyxor NYSE Arca Gold BUGS (<LU0488317701>) and VanEck Gold Miners (IE00BQQP9F84), which both track gold producers. For that, investors are betting on the iShares Stoxx Europe 600 Health Care (DE000A0Q4R36) and the L&G Healthcare Breakthrough (IE00BK5BC677). Energy stocks are also clearly in demand, with the iShares S&P 500 Energy Sector (IE00B42NKQ00), for example.

Energy is also the big theme at Lang & Schwarz. "For us, quite a lot revolves around oil," Bendt describes the situation. He observes a lot of buying for the iShares Oil & Gas Exploration & Production (IE00B6R51Z18) and the iShares MSCI World Energy Sector (IE00BJ5JP105), but also for oil ETCs such as the WisdomTree WTI Crude Oil 2x Daily Leveraged (<DE000A2BDEB6>). The oil price takes again course to 120 U.S. dollars per barrel Brent, on Tuesday noon the price is only slightly below. Background are prospects of a reduced supply from Russia as a result of new EU sanctions.

Cashing in on inflation-linked bonds

There is no discernible pattern in the bond ETF business: according to Heuclin, the trend is toward government bonds, especially from the U.S. (IE00B1FZS798), but also from Germany. Mohr reports high turnover in the SPDR Bloomberg Euro Government Bond (IE00B3S5XW04) with European bonds - but in both directions. China's government bonds (IE00BYPC1H27) continue to be sold by BNP clients*.

US corporate bonds (IE0032895942) and - with the SPDR Bloomberg SASB 0-3 Year Euro Corporate ESG (IE00B6YX5H87) - short-dated eurozone corporate bonds with a sustainability focus are finding favor, according to Heuclin. Floating rate corporate bonds, on the other hand, are being dumped, Mohr notes, such as with Amundi Floating Rate Euro Corporate ESG (LU1681041114).

Meanwhile, clients of BNP Paribas are also selling inflation-linked bonds again, for example with Lyxor EUR 2-10Y Inflation Expectations (LU1390062245). This had performed extremely well until the beginning of May, but has recently weakened.

by Anna-Maria Borse 31 May 2022, © Deutsche Börse AG