The Russian gas supply freeze has temporarily weighed on sentiment in the ETF market. At present, equity index classics and commodity ETCs are in selective demand with moderate turnover.
6 September 2022. Frankfurt (Börse Frankfurt). After the price losses on the stock markets since mid-August, selective buying now dominates. At Lang & Schwarz, there is more buying than selling, reports Fabian Wörndl. Turnover is still moderate due to the holidays, but this changes depending on the news. "When the news comes in, we see jumps in turnover." In general, however, trading is still relatively quiet.
Jan Duisberg of ICF Bank also confirms a low level of turnover: "The slide in prices in recent weeks is not reflected on the turnover side - we see neither panic nor big buying."
Duisberg
After the slide in the DAX by 400 points at times on Monday - triggered by concerns about energy prices here at home following the supply stop of gas from Russia through the Nord Stream 1 pipeline - the market is stabilising. The DAX is up 0.7 per cent at 12,853 points at midday.
Lots of turnover in index classics and leveraged products
According to Duisberg, investors* would consider the current levels interesting and invest mainly in index products. "We are seeing greater activity here," the trader explains. The order book shows turnover especially in German and global equity index products such as the Deka DAX UCITS ETF (DE000ETFL011) and the Deka MSCI World (DE000ETFL508). Wörndl also registers purchases mainly in classic global equity ETFs such as the MSCI World (IE00B4L5Y983). "It is the unbeaten favourite." In addition, he said, leveraged products are being bought. Demand is particularly high for WisdomTree's triple-leveraged NASDAQ 100 long (IE00BLRPRL42) and - depending on market conditions - its short counterpart (IE00BLRPRJ20), while Duisberg's leveraged investments are mainly in the DAX (IE00B8GKPP93). Volatility is also in focus: "With more volatility in the market, people are buying again," explains Wörndl.
Fixed Income: Shares instead of Bonds
According to the experts, the focus on large equity indices is at the expense of bond market products. Although economic worries are increasing due to the energy crisis, the bond market as a safe haven is not benefiting," comments Burkhard Fehling from Commerzbank. Inflation and the turnaround in key interest rates would dominate too much.
Sectors: Oil & Gas dominate
In the sector analysis, exotic products are losing ground. According to Duisberg, hydrogen is an exception: L&G Hydrogen Economy (IE00BMYDM794) is bought when turnover is brisk. Investments in gas and oil dominate the sector analysis. Gas is still 23 percent more expensive than on Friday with the absence of deliveries from Nord Stream 1. "Germany is now buying more gas from Norway," comments Andreas Hürkamp of Commerzbank. And via the Netherlands and Belgium, a lot of liquefied gas is flowing into the German storage facilities, which are now 85 percent full.
Investors are nevertheless betting on these commodities and buying them: Wörndl reports purchases, especially in the iShares Oil & Gas Exploration & Production ETF (IE00B6R51Z18), which has gained 10 per cent over the month. Over one year, its performance improved by 99 per cent. Alternatively, he would buy more broadly diversified commodity solutions such as the Lyxor Bloomberg Equal-weight Commodities ex-Agriculture (<LU0419741177>). Its largest position, natural gas, of just over 9 per cent, is followed by investments in zinc, platinum, copper, palladium and gold.
Crypto ETPs profit from the market recovery
The order books of Lang & Schwarz show more demand for cryptocurrencies. "Interest has increased significantly here," explains Wörndl. "We are seeing more inflows, even though bitcoin in particular has tended to move sideways." Market participants are particularly focused on BTCetc - ETC Group Physical Bitcoin ETN (DE000A27Z304).
Shares | |
World | Buys |
Germany | Buys |
Industries | |
Oil and Gas | Buys |
Cryptos | Buys |
by: Antje Erhard, 6 September 2022, © Deutsche Börse AG
Antje Erhard is a journalist and moderator specialising in the stock market, business and finance.
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