FRANKFURT (DEUTSCHE-BOERSE AG) – With the strong price gains, many are becoming bolder again in ETF trading, while others do not yet fully trust the thing. There is a lot going on in trading with trackers for UK and emerging market stocks.
November 1, 2022. FRANKFURT (Frankfurt Stock Exchange). The new momentum on the stock markets stimulates ETF trading. “We are seeing more activity again and significantly more purchases,” reports Frank Mohr from Société Générale. Holger Heinrich from Baader Bank, on the other hand, reports more sales. “And this despite the fact that the stock markets recovered last week – an atypical development.” In his opinion, this could be an expression of skepticism about future developments.
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The DAX continues its course upwards on the first day of November, at noon the index is at 13,420 points. The reason for the price gains: hopes for a slower pace of interest rate hikes.
US values as favorites
As far as equity ETFs are concerned, Mohr once again focuses on US and global equities, this time followed by DAX ETFs. “That’s unusual now.” Buying dominates US and global stocks. The portfolios include, for example, the Xtrackers S&P 500 (LU0490618542), the Franklin S&P 500 Paris Aligned Climate (IE00BMDPBZ72), which is aligned with the Paris climate goals, the Vanguard S&P 500 (IE00B3XXRP09) and the iShares Core MSCI World (IE00B4L5Y983). “With DAX ETFs (DE0005933931) we see significantly higher activity, but overall more sales,” notes Mohr. The turnover in British shares is also strikingly high at the moment. “You don’t see it that way otherwise.” For example, the iShares Core FTSE 100 (IE0005042456) will be bought.
According to Heinrich, ETFs with US values are traded most actively. “And again, these are mostly constructs with sustainability filters.” He also cites the Franklin S&P 500 Paris Aligned Climate as an example, along with the HSBC USA Sustainable Equity (IE00BKY40J65) and the SPDR S&P 500 ESG Leaders (IE00BH4GPZ28). Among the index funds with European titles, Quality and EMU shares (LU1215451524) and (LU0147308422) are ahead, adds Heinrich.
China and Brazil: Lots of headlines, lots of sales
Chancellor’s visit to China, rumors of a departure from Beijing’s zero-Covid strategy, Lula’s re-election as president in Brazil – there is a lot of news coming from the emerging markets at the moment. “We have a lot going on in ETFs with emerging market shares,” reports Torben Bendt from Lang & Schwarz. “The markets had fallen sharply, now they are recovering a little.” He registers relatively many purchases for MSCI Emerging Markets trackers from Xtrackers and Amundi (IE00BTJRMP35, LU1681045370). Chinese technology stocks are also in high demand, such as HSBC Hang Seng Tech (IE00BMWXKN31) or Xtrackers FTSE China 50 ().
Consumer values: No, thank you
The reluctance to consume because of the high energy prices is also reflected in trading in sector ETFs. Clients of Société Générale are shedding consumer goods ETFs such as the SPDR MSCI Europe Consumer Staples (IE00BKWQ0D84). It includes companies like Nestlé, Unilever, Diageo, L’Oréal, Pernod Ricard and Danone.
On the other hand, Mohr reports inflows for US technology (IE00BWBXM948) and European real estate stocks (IE00B0M63284). He also registers significant purchases for the WisdomTree Cybersecurity (IE00BLPK3577). At Baader Bank, stocks from the infrastructure and communications sectors in particular recorded high turnover.
US cross-country skiers in demand
Government bonds dominate in bond ETF trading. According to Mohr, investors bought long-dated US government bonds (LU1407890620) and European government bonds with a good rating (LU1681046691). On the other hand, they disposed of European government bonds with maturities of one to three years ().
Bet on Ethereum
According to Bendt, Ethereum ETNs, such as the VanEck Ethereum (DE000A3GPSP7), are also popular this week, as are Bitcoin trackers. The cryptocurrencies have recently been able to recover slightly, the Bitcoin price has risen above 20-000 US dollars again.
by: Anna-Maria Borse, November 1, 2022, © Deutsche Börse AG
(Deutsche Börse AG is solely responsible for the content of the column. The articles are not an invitation to buy or sell securities or other assets.)