ETF: Oil stocks high in demand

The flare-up of the Middle East conflict has not resulted in any major waves of selling on the ETF market. But some things are now more in demand than before, such as shares in oil companies. Always in demand: Money market trackers.?

10?October 2023. FRANKFURT (B?rse Frankfurt).?The Hamas attack on Israel is also making itself felt in ETF trading. "Turnover is up," reports Frank Mohr of Société Générale. "However, we do not see a wave of selling in the equity report, and certainly no panic." Fabian W?rndl of Lang & Schwarz also can't see any major selling of equity ETFs - on the contrary: "Inflows into MSCI World ETFs are unbroken." Stocks from some sectors are even doing particularly well, for example from the oil sector, he said.

Yesterday, the DAX had reacted to the news from Israel with price losses. However, the U.S. stock markets ultimately went up. Today, Tuesday, the DAX is also increasing significantly again, at noon the index is already back at 15,364 points.

Betting on a further rise in oil prices

According to Mohr, the main focus in the equity ETF business continues to be the major indices such as MSCI World, S&P 500 or Euro Stoxx 50 - with at most smaller sales at the beginning of the week. At Lang und Schwarz, the iShares Core MSCI World (IE00B4L5Y983) continues to do well. Mohr, incidentally, identifies a larger trend: "We're seeing more and more interest in active ETFs, even if it's not yet translating into massive buying." The providers' efforts were making themselves felt. Major issuers of active ETFs include JP Morgan and Fidelity.

Also in high demand at the moment, according to W?rndl, are oil equity ETFs such as the iShares Oil & Gas Exploration & Production (IE00B6R51Z18) and the iShares Stoxx Europe 600 Oil & Gas (DE000A0H08M3). Both have made significant gains recently. However, things have not always gone well this year, with year-to-date gains of 7.7 and 7.3 percent, respectively. Shares of gold producers are also in demand, such as with Lyxor NYSE Arca Gold (LU0488317701), he said. Oil and gold prices had risen sharply yesterday, but are already giving up some ground today.

High-turnover energy and gold ETCs

According to W?rndl, there is also a lot of turnover in the two leveraged gas ETCs from WisdomTree (IE00BLRPRG98, IE00B76BRD76. These can be used, each with leverage three, to bet on a rising or falling gas price, respectively. He also reports purchases and sales for Xetra-Gold (DE000A0S9GB0).

In bond ETFs, money market and near-money market trackers remain favorites. Lang & Schwarz reports a lot of interest in Xtrackers II EUR Overnight Rate Swap (LU0290358497).

Tops and Flops in September

In September, the best and worst performing ETPs tended to be risky products: ETPs on the cryptocurrency Chainlink, on uranium as well as oil performed the best, according to Morningstar, an analyst firm. Specifically, products from 21Shares, CoinShare and VanEck on Chainlink (CH1100083471, GB00BMWB4910, DE000A3GXNV0) ranked in the top three. "The price of LINK experienced a massive rally after bottoming out in early September, closing the month up 33 percent," explains Morningstar's Valerio Baselli. At the bottom are thematic strategies on electric vehicles and other cryptos, as well as silver and wheat. Examples include Electric Vehicle Charging Infrastructure (IE000HMSHYJ6) and GlobalX Blockchain (IE000XAGSCY5), down 18 percent and 14 percent, respectively. Morningstar points out that the monthly top and flop performers are often highly volatile and therefore risky products. "They should definitely play only a small role in your portfolio. A bigger part of your portfolio should be the big ETFs."

by: Anna-Maria Borse , 10?October?2023, ? Deutsche B?rse AG