ETFs: "Tech stocks in high demand"
Tech stock fans took a beating in 2022, but things are looking better this year. ETF investors are also getting involved. But classic trackers for US, global and European stocks are also in demand.
7 March 2023. Frankfurt (Börse Frankfurt). The buying mood continues in the ETF business. No wonder: things are going well on the stock markets. The DAX has risen by almost 12 percent since the beginning of the year, and the S&P 500 by almost 6 percent. Particularly noticeable in ETF trading: the high inflows into technology index funds. “We see a lot of purchases there,” explains Frank Mohr from Société Générale. After a rise, setback and rise again this year, the US technology index Nasdaq 100 is now up to 13 percent.
Overall, Mohr reports strong turnover and inflows into US and global equities as well as eurozone equities. "Business is balanced for German shares." Fabian Wörndl from Lang & Schwarz reports brisk sales in MSCI World and S&P 500 trackers. There's also a lot going on at Baader Bank: "With rising sales, we had around 85 percent more purchases than sales in parallel with the rising stock markets," notes Holger Heinrich.
"Across the Spectrum"
"All in all, customers have again boldly bought across the entire spectrum," adds Heinrich. The shopping lists would include Nasdaq trackers with an ESG filter such as the Invesco Nasdaq 100 ESG (IE000COQKPO9) and S&P trackers such as the UBS S&P 500 (IE00B7K93397), but also minimum volatility products such as the iShares Edge MSCI USA Minimum Volatility ESG (IE00BKVL7331), also with sustainability filter. “Global standard products (IE00BMZ17W23) were in somewhat greater demand, as were ETFs with a focus on high-dividend stocks (IE00077FRP95)," reports Heinrich. As far as European equities are concerned, large cap products would be bought, for example the iShares MSCI EMU Large Cap (IE00BCLWRF22).
According to Mohr, things have calmed down again for the emerging market ETFs, which had previously attracted more attention. "There's a lot less going on there at the moment." Wörndl also reports increased purchases, such as the iShares EM Dividend (IE00B652H904). It tracks companies from emerging markets with high dividend yields.
Wanted tech stocks, no more energy stocks
According to Mohr, the portfolios also include Xtrackers MSCI World Information Technology (IE00BM67HT60) and iShares Automation & Robotics (IE00BYZK4552). Prices are up to 15.3 percent and 16.4 percent year-to-date.
On the other hand, shares of gold producers are experiencing slight losses: Mohr registers inflows and outflows equally (<LU0488317701>, IE00B6R52036), Wörndl more purchases. According to Société Générale, energy stocks are mostly on the surrender lists, for example the iShares S&P 500 Energy Sector (IE00B42NKQ00). "That could be profit-taking after the strong price increase in 2021 and 2022."
Short-term oriented investors speculate on the further development of the gas price: At Lang & Schwarz, there is a lot going on in gas ETCs from WisdomTree with leverage 3, long and short (<IE00BLRPRG98>, <IE00B76BRD76>).
Mohr
Bond ETFs:Mixed preferences
Corporate or government bonds – both are currently in demand. According to Mohr, the focus is on US government bonds and European corporate bonds with maturities of up to three years (IE00BC7GZW19), but also on mixed portfolios with European ESG bonds (IE00B3DKXQ41). According to Heinrich, a rather unusual product is also selling well at the moment: the BlackRock ESG Multi-Asset Conservative Portfolio ETF (IE00BLP53M98). This is an actively managed ETF that is rather conservative on different asset classes, currently 84 percent on bonds and 12 percent on stocks, the rest flows into cash. However, with 14 million in funds collected, the ETF launched in September 2020 is very small.
The bigger the better?
Some ETFs have grown enormously with the boom in the market. The two largest ETFs, iShares core products on the S&P 500 (IE00B5BMR087) and the MSCI World (IE00B4L5Y983), have a fund volume of 50 and 45 billion euros, as current figures from justETF show. The next places on the "biggest list" are the S&P 500 tracker from Vanguard (IE00B3XXRP09) with almost 27 billion euros and the iShares Core MSCI Emerging Markets (IE00BKM4GZ66>), the iShares Core FTSE 100 (IE0005042456) and other S&P 500 trackers from iShares (IE0031442068) and Invesco (IE00B3YCGJ38) at €11-15 billion each. Incidentally, gold ETCs also play in the top league: Invesco Physical Gold (IE00B579F325), Xetra-Gold (DE000A0S9GB0) and iShares Physical Gold (IE00B4ND3602) all manage around 13 billion euros in funds.
"Of course, ETFs with a small fund volume can also be interesting for a provider and exist on the market in the long term," explains justETF founder and managing director Dominique Riedl. However, he points to the risk of fund closures for small ETFs and the cost advantages of large ETFs. “As an ETF grows in size, so does the number of shares outstanding. This ensures lower buying and selling margins.” More on this: https://www.justetf.com/de/news/etf/etfs-und-fondsvolumen.html.
| Equities | |
| USA | Purchases |
| World | Purchases |
| Europe | Purchases |
| Branchen | |
| Technology | Purchases |
| Gold percentage | Purchases/Sales |
| Energy | Sales |
from: Anna-Maria Borse, 7 March 2023, © Deutsche Börse
About the author
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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Borse
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