ETFs: Preferably well diversified
Investors focus on broadly diversified MSCI World portfolios and European midcaps. Thematic stocks such as clean energy and battery technology are in demand. In the bond segment, Chinese government bonds are being bought as well.
2 February 2021. FRANKFURT (Börse Frankfurt). After a promising start to the year with new highs, but also larger swings, the DAX ended January slightly lower. In addition to the ongoing issue of Corona and its mutations, bottlenecks in vaccine procurement and distribution dampened investor sentiment.
For Hubert Heuclin of BNP Paribas, the vaccine situation is not the only decisive factor for the further direction of the stock markets. But it will factor into decisions about regional exposures, he said. According to Heuclin, recent trends indicate that analysts may be too optimistic about the prospects of European stocks relative to U.S. stocks in their annual forecasts.
Diversification matters
In ETF trading, BNP Paribas recorded overall inflows to developed market equities last week, with the exception of eurozone stocks. Classic MSCI World ETFs with (IE00B4L5Y983) and without currency hedging against the euro (IE00BKBF6H24) ranked high in the turnover statistics.
Andreas Schröer from Lang & Schwarz confirms the trend toward MSCI World products. "We had a lot of buying demand in the segment."
Florian Lenhart of UniCredit reports strong interest in products referencing MSCI World Monthly EUR Hedged (IE00B441G979). "Buying and selling were more or less in balance for us."
Focus on European mid caps
Lenhart sees stocks of mid-sized European companies related to the Euro Stoxx Mid (IE00B02KXL92) as mostly buys.
According to Heuclin, investors mostly parted with European blue chips in the Euro Stoxx 50 (FR0012740983). This also applies to German blue chips in the DAX (LU0838782315).
Heuclin
Reach for green U.S. and emerging market equities
Products tracking the MSCI Emerging Markets IMI ESG Screened (IE00BFNM3P36) saw significant inflows, according to Heuclin. These were also among Schröer's most-bought stocks.
The trader also sees S&P 500 ESG (IE00BKS7L097) and MSCI USA SRI Filtered ex Fossil Fuels products (<LU1861136247>) up on the bottom line, at the expense of traditional S&P 500 ETFs (IE00B5BMR087).
Themes fuel the imagination
Tracker of the S&P Global Clean Energy (IE00B1XNHC34), however, traders unanimously count among the biggest profiteers once again. In the past year, the value gained a sensational 120 percent. Heuclin's clients also covered the WisdomTree Battery Solutions ETF (IE00BKLF1R75) with conspicuous frequency, with its value nearly doubling since inception last April.
To be sure, themes have played a role among European investors for years. In 2020, however, interest in themed ETFs rose disproportionately, with inflows totaling €8.9 billion, according to Morningstar. The trend has accelerated even further in this still young year, it said. According to the analyst firm, 2.6 billion euros had already been collected by theme ETFs by 27 January 27. The assets of these products now amount to 26.4 billion euros.
Include risks
In the opinion of Morningstar editor Ali Masarwah one can be richly rewarded with topics though. In the top 20 the tail end in the past year still increased by almost 30 percent, while the standard world index MSCI ACWI grew only 6.7 percent. However, it does not have to continue at this pace. In addition, some top performers have concentrated portfolios of comparatively few shares. This increases the risk of betting on the wrong horse. Masarwah therefore believes that theme investments should be added to an otherwise well-diversified portfolio.
Masarwah
Good credit rating desired
In fixed income trading, Heuclin informs about a conspicuous amount of interest in Chinese government bonds referenced to the Barclays China Treasury Policy Bank Index (IE00BYPC1H27). Otherwise, he says, interest in fixed income has been limited.
Lenhart registers strong inflows and outflows in Bloomberg Barclays Euro Corporate Bond ETFs (IE00B3F81R35), among others.
By: Iris Merker
2 February 2021, © Deutsche Börse AG
Deutsche Börse 
