ETFs: Nervousness gives way to FOMO
U.S. equity trackers are leading the market rally. Asian equities as well as technology and energy stocks are also bought in the friendly environment.
18 October 2022. Frankfurt (Börse Frankfurt). Predominantly positive quarterly figures, which dampen recession worries and bring price gains worldwide, also lift the buying mood on the ETF market. The withdrawal of the UK's tax cut plans mainly contributes to the calming of the bond markets and also provides relief worldwide. The DAX is striving towards the 13,000 point mark.
However, analysts warn against overly high expectations: The declining ISM index in the U.S. warns against too much optimism, classify Ralf Umlauf and Ulrich Wortberg of Helaba. It is true that the ISM production index has increased slightly and car sales have risen. "With regard to interest rate expectations, however, hardly any impetus was given." In the U.S., a strong interest rate hike is still expected for the beginning of November, and a majority at the ECB is also expecting an increase of 75 basis points.
The fear of missing out returns
Frank Mohr of Société Générale explains that the market recovery brought about by the rather positive quarterly figures so far has investors reaching for equities again. "We see nervousness giving way to fear of missing out. From there, we have a bit more buying, although investors are uncertain and cautious." Hubert Heuclin of BNP Paribas reports a quiet trading week.
Torben Bendt of Lang & Schwarz also notes continued caution in the ETF business. "We are noticing less volume year-on-year."
U.S. indices remain favorites
At Société Générale, U.S. equity ETFs are again the main purchases, while global in.vesting index funds, which were also among the favorites in recent weeks, are being sold. "U.S. trackers account for 30 percent of equity ETF sales." Among the most bought stocks is the iShares Core S&P 500 (IE00B5BMR087), one of the classics.
Mohr
Asia returns to investor focus
However, the situation at BNP Paribas is different: Hubert Heuclin reports on sales of U.S. stocks. First and foremost, the Lyxor S&P 500 (<LU1135865084>) is on the sell lists. ETFs with stocks from the euro zone are also being removed from the portfolios, such as the Amundi Euro Stoxx 50 (LU1681047319). In contrast, Korean equities were in above-average demand with the iShares MSCI Korea (<IE00B5W4TY14>). In addition, BNP Paribas clients were active in Swiss equities, as in the previous week. They are buying Xtrackers Switzerland (LU0274221281) and iShares Core SPI ETF CH (<CH0237935652>).
In Lang & Schwarz's day-to-day business, Asian index funds are moving into investor interest. "Here we have significantly more demand this week," reports Bendt. Buying is taking place in Chinese equities with the Xtrackers FTSE China 50 (LU0292109856) as well as broader emerging markets ETFs, including the Amundi MSCI Emerging Markets (LU1681045370).
Sectors: buying healthcare, technology, financials and energy ETFs.
The technology sector, where buying predominates, is the most in focus of the sectors in trading at Société Générale. European companies (DE000A0H08Q4) are experiencing particularly high demand here.
According to Mohr, purchases also predominate in energy stocks, the number two in trading with sector ETFs. Here investors*innen would take particularly the SPDR S&P US Energy Select Sector (IE00BWBXM492) into the depot. It had risen from 29 to more than 31.50 euros at times during the week, but has given back some of the price gains.
Bendt also reports that demand for energy ETFs is increasing. "After the strikes in France and with an eye on the winter, people are speculating on rising prices here." Popular buys include Lyxor New Energy (FR0010524777) and iShares' classic Global Clean Energy (IE000U58J0M1).
Mohr adds that buying also predominates in the consumer staples sector, which ranks highest in turnover among Société Générale's sectors, such as the SPDR S&P U.S. Consumer Staples Select Sector (IE00BWBXM385). It is up about 2.5 percent for the week.
In contrast, Lang & Schwarz is looking for niches depending on the news. Currently, the demand for gold producers is increasing. Investors* would acquire the VanEck Junior Gold Miners (IE00BQQP9G91) as in the previous week, but also the VanEck Gold Miners (IE00BQQP9F84).
Bonds: easing
Yields ease in the bond market after the U.K. government announced it was backing away from its tax cut plans, the funding for which had not been secured.
In bond ETF trading, Mohr notes slightly more trading volume week-over-week. "However, the selling overhang continues in government bonds, which remain the focus of bond trading this week." The selling was in short-dated European government bonds, such as in Amundi Govt Bond EuroMTS Broad Investment Grade 1-3 (<FR0010754135>), and longer-dated European debt, including Deka Deutsche Boerse EUROGOV Germany 10+ (DE000ETFL219).
European corporate bonds (IE00B3F81R35), including high-yield (IE00B66F4759), on the other hand, would be bought.
Heuclin also notes demand for eurozone corporate paper. At BNP Paribas, Xtrackers II ESG EUR Corporate Bond Short Duration (LU2178481649) is bought. However, eurozone government bonds of short (LU0290356871) and medium maturities (LU2244387457), as well as U.S. securities, also receive inflows. Of the U.S. fixed-income securities, all maturities were in demand, he said. BNP Paribas saw the highest volume in this category in the iShares USD Treasury Bond 7-10yr (IE00B3VWN518). Among shorter-dated paper, purchases of the iShares USD Treasury Bond 1-3yr (<IE00BYXPSP02>) dominate trading.
Heuclin
At BNP Paribas, trading in both corporate and government securities is quite balanced. As in the previous week, transactions in fixed-income securities are stronger compared to equities.
| Equity | |
| World | Sell |
| US | Buy |
| Asia | Buy |
| Eurozone | Sell |
| Sectors | |
| Technology | Buy |
| Energy | Buy |
| Consumer staples | Buy |
| Gold miners | Buy |
| Fixed-income | |
| US treasuries | Buy |
| Euro bonds | Buy and sell |
| Corporates Eurozone | Buy |
von: Antje Erhard, 18. Oktober 2022, © Deutsche Börse AG
Über die Autorin
Antje Erhard ist Journalistin und Moderatorin mit den Schwerpunkten Börse, Wirtschaft und Finanzen.
Feedback und Fragen an redaktion@deutsche-boerse.com.
Erhard
Deutsche Börse 
