ETF weekly: "Basically bought all regions"

6?December 2023.?FRANKFURT (B?rse Frankfurt): New highs for the year on Wall Street and hopes of a new all-time high for the DAX are ensuring good turnover in ETF trading. "When things go up, people buy," says Ivo Orlemann, who trades ETFs for ICF Bank. Andreas Schr?er from Lang & Schwarz also reports brisk turnover. According to Frank Mohr from Société Générale, buying is very much in the majority this time, although the volume is "normal". The DAX stood at 16,430 points at midday on Tuesday, just below the record high of 16,524 points reached this summer. On Friday, the Dow Jones rose above 36,000 points for the first time since January 2022, and the record high is not far away here either.

Particularly popular at the moment: global and US equities, as Mohr notes, with a clear surplus of buyers. MSCI World ETFs from iShares (IE00B4L5Y983) and Lyxor/Amundi (LU1781541179) as well as S&P 500 trackers from Vanguard (IE00B3XXRP09) and Invesco (IE00B3YCGJ38) are at the top of the shopping lists. "But basically all regions are being bought." Schr?er also reports high turnover in MSCI World ETFs, and sometimes sales, depending on the day. According to Orlemann, MSCI USA ETFs (IE00B60SX170) are sometimes bought and sometimes sold. There is also always something going on in DAX (DE000ETFL011) and Euro Stoxx trackers.

Nasdaq gain of 46 percent is convincing

The Nasdaq 100 has also risen sharply recently, gaining 46% since the beginning of the year despite recent profit-taking. Simple Nasdaq trackers (LU2197908721) remain popular, as Orlemann reports. However, leveraged Nasdaq ETFs, long and short (IE00BLRPRL42, IE00BLRPRJ20), are also very popular.

In trading with sector ETFs, technology ETFs are once again leading the way, as Mohr explains - with purchases clearly dominating. "These are always the same products that are well received." The iShares Automation & Robotics (IE00BYZK4552), iShares S&P 500 Information Technology (IE00B3WJKG14), Xtrackers MSCI World Information Technology (IE00BM67HT60) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51), for example, are being snapped up.

Bitcoin soaring: blockchain companies benefit

A lot is also happening in equity ETFs from the blockchain and crypto sectors. The reason: the soaring price of Bitcoin due to the hope that a Bitcoin ETF will be approved in the USA. Over the weekend, the Bitcoin price climbed back above the USD 40,000 mark for the first time since April 2022, reaching USD 41,668 at midday on Tuesday. According to Schr?er, there is a lot going on in VanEck Crypto and Blockchain Innovators (IE00BMDKNW35) and Invesco CoinShares Global Blockchain (IE00BGBN6P67). "We are seeing a lot of buying, but also profit-taking." The two ETFs have performed very differently since the start of the year: The price of the VanEck ETF has tripled since the beginning of the year, while that of the Invesco ETF has "only" reached 32 percent.

According to Société Générale, energy and healthcare ETFs, such as the Amundi MSCI New Energy ESG Screened (FR0010524777) and the iShares MSCI World Health Care (IE00BJ5JNZ06), are on the sell lists.

ETF market

The ETF market benefited from rising equity markets and falling bond yields in November, according to issuer SPDR. Particularly in demand: equity ETFs with inflows totaling 14.1 billion US dollars. "US equities and global strategies were particularly well received - supported by significant price gains in the S&P 500 and a price increase of almost 10 percent in the MSCI World," reports Sophia Wurm, Vice President SPDR ETFs at State Street Global Advisors. Sustainable US benchmarks also enjoyed renewed popularity: "The S&P 500 ESG Leaders alone recorded net inflows of USD 560 million." In terms of sectors, European pharmaceutical stocks were in demand alongside US technologies, while banks and energy stocks suffered losses. Bond ETFs also recorded inflows, totaling USD 8.1 billion.

Money market funds with inflows and outflows

Bond ETFs currently account for a large proportion of ETF turnover at Société Générale, as Frank Mohr also notes. "The 40 percent is well above average." Money market ETFs such as the Xtrackers II EUR Overnight Rate Swap (LU0290358497) continue to see a lot of turnover, but now with not only purchases, but turnover in both directions. ETFs with access to short-dated corporate or government bonds were mostly sold.

Brisk turnover in crypto ETFs

The rise in Bitcoin is also noticeable in trading with crypto ETNs. Most of it revolves around Bitcoin ETNs, as Schr?er reports, such as 21Shares Bitcoin (CH0454664001). Orlemann also sees rising crypto ETN turnover, mostly purchases, but also profit-taking. In focus: Bitcoin ETNs from VanEck (DE000A28M8D0) and WisdomTree (GB00BJYDH287), but to a lesser extent also Solana trackers from VanEck (DE000A3GSUD3) and 21Shares (CH1114873776).

The new all-time high in gold, on the other hand, is hardly noticeable, as traders explain. Schr?er reports "normal" business in gold ETCs, while Orlemann also sees hardly any turnover in gold mining ETFs.

by Anna-Maria Borse, 5?December 2023 ? Deutsche B?rse AG