01/07/25 12:03:07

ETFs: This time, “America first”

European stocks over US stocks? That's a thing of the past. US stocks are now more popular. Defense ETFs also remain in demand. Active ETFs are becoming increasingly popular, as a study shows.


1.July 2025. FRANKFURT (Börse Frankfurt). The fact that US stocks have continued to catch up with European stocks is also noticeable on the ETF market. As Holger Heinrich from Baader Bank reports, US stocks are now being bought again, while global and European stocks are being bought and sold. Overall, however, the ETF business is currently quiet – partly due to the geopolitical détente resulting from the ceasefire in the Israel/Iran conflict. Overall, purchases predominate, as Heinrich also reports. “Defense stocks continue to be in high demand,” notes Ivo Orlemann of ICF Bank. Moritz Kretschmann of Lang & Schwarz also sees a lot of interest in defense ETFs. “Gold and silver ETCs are also well received.”

The S&P 500 and Nasdaq 100 reached new all-time highs again yesterday, Monday. This continues the race to catch up with European stocks, which have long been favored. With gains of just under 6 and 8 percent since the beginning of the year, the S&P 500 and Nasdaq 100 are now roughly on par with the European Stoxx Europe 600 index (up 6 percent). However, the DAX is still well ahead with a gain of 19 percent.

No clear picture for European equities

According to Heinrich, MSCI USA (IE00B77D4428) and Nasdaq trackers (IE00BYVQ9F29) are ending up in portfolios, as are ETFs on the Russell 2000 small-cap index (IE00B60SX402). “Purchases and sales are roughly balanced for world ETFs,” he explains. For example, the iShares Core MSCI World (IE00BKBF6H24) is being bought, while the UBS MSCI World Selection (IE000TG1LGI4) is being sold.

Both sides are also being played with regard to European equities. Heinrich sees inflows for the iShares MSCI EMU Large Cap (IE00BCLWRF22), for example, and outflows from the iShares Euro Stoxx Small (IE00B02KXM00). “At the individual country level, France was on the buy list, while Germany and Italy were more likely to be sold,” adds the trader.

Private investors are also investing in active ETFs.

Four out of ten private investors are already investing in active ETFs, according to a recent study by JP Morgan Asset Management and the ETF platform extraETF. Active ETFs have long been the domain of institutional investors, but now they are also proving popular with many private ETF investors, the study says. The main motive is the desire for active management at favorable conditions, as stated by 55 percent of those already investing in active ETFs. The opportunity to maximize returns follows with 45 percent. Surprisingly, one-fifth of those surveyed invest in active ETFs with relatively high savings plan rates of $500 or more. The average ETF savings plan rate in Germany is only €136. Over 1,000 private investors were surveyed in early summer 2025 via the extraETF platform. 

Defense ETFs: Continuing upward

According to Orlemann, the three defense trackers VanEck Defense (IE000YYE6WK5), WisdomTree Europe Defense (IE0002Y8CX98), and Global X Defense Tech (IE000JCW3DZ3) continue to be sought after in industry ETF trading. According to Kretschmann, the WisdomTree ETF is the favorite. After a brief setback, the prices of all three index funds have recently risen again, probably driven by NATO's decision to increase defense spending to 5 percent of GDP.

Ivo Orlemann

Ivo Orlemann 

Precious metal trackers popular

There is also some movement in gold and silver ETCs, as Kretschmann observes. Although the gold price is currently below its record high of just under US$3,500 at US$3,340, it has risen by 43 percent over the past twelve months and by 74 percent over the past two years, while the price of silver has risen by 24 and 59 percent respectively.

By Anna-Maria Borse, 1 July 2025, © Deutsche Börse AG

Anna-Maria Borse is a financial and business editor specializing in financial markets/stock exchanges and economic issues.

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