ETFs: "The breadth of ETFs purchased is increasing"

ETF traders on the Frankfurt Stock Exchange are reporting a significant buying overhang. The focus is primarily on products based on US and tech stocks as well as cryptocurrencies. However, other segments are also increasingly in demand. ?

26. March, 2024. FRANKFURT (B?rse Frankfurt).??The run on exchange-traded funds (ETFs) on the Frankfurt Stock Exchange continues. "The desire to buy is unbroken," reports Holger Heinrich from Baader Bank. However, the focus of the products traded varied more than usual. "What was striking last week was the breadth of ETFs bought". With slightly higher turnover and a clear buying overhang, the focus was on ESG products. The trader recorded good turnover in the Amundi PEA MSCI USA ESG Leaders (LU1681042864) and the Amundi MSCI USA ESG Climate Net Zero Ambition (IE000QQ8Z0D8), for example. In addition to the major equity indices (e.g. Xtrackers S&P 500 EUR Hedged (IE00BGJWX091), small caps were also in demand via the L&G Russell 2000 US Small Cap Quality (IE00B3CNHJ55).

An observation that Frank Mohr from Société Générale generally shares. Here, too, the majority of purchases were made, with equity ETFs clearly in the foreground. Products on the S&P 500 were particularly popular, with the trader observing persistently strong buying in the SPDR S&P 500 (IE00B6YX5C33), known as the "Spider", where "high volumes have been collected in recent weeks". The S&P 500 ETFs from iShares (IE00B5BMR087) and Vanguard (IE00B3XXRP09) were also on investors' shopping lists.

Emerging markets, strategies and lots of cryptos

Mohr also registered good turnover in the iShares Core MSCI EM (IE00BKM4GZ66). "For the first time in many months, an emerging markets product is in the top 10 most traded". There has also been an increase in turnover in the eurozone. According to Heinrich, in addition to Stoxx indices and classic country ETFs, two strategy ETFs are also attracting attention. The ETF specialist reports strong demand for the Amundi MSCI Europe Momentum Factor (LU1681041460) and the SPDR Euro Stoxx Low Volatility (IE00BFTWP510).?

ICF Bank's clientele currently seems to be focused almost exclusively on cryptocurrencies. Around 90 percent of turnover on the Frankfurt Stock Exchange is accounted for by the corresponding ETNs. Jan Duisberg reports "super strong turnover" across the entire segment. There is trading in both directions, with purchases predominating. Demand is particularly strong for Solana ETNs from VanEck (DE000A3GSUD3) and 21Shares (CH1114873776). The trader also sees good buying in the 21Shares Polkadot (CH0593331561). In the case of the major cryptocurrencies, sell-offs currently predominate somewhat. Duisberg cites the 21Shares Bitcoin Core (CH1199067674) and the VanEck Ethereum (DE000A3GPSP7) as examples. "A bit of cash is being made here," Duisberg suspects.

Out of the money market, into equity ETFs Some positions in short-dated bonds are also being liquidated. Mohr sees the majority of sales in the iShares EUR Ultrashort Bond (IE00BCRY6557) in particular. In Lyxor Euro Overnight Return (FR0010510800), the ratio is just as balanced as in the Amundi Index Euro Corporate SRI 0-3Y (LU2037748774), where there is "very high activity on both sides". It is possible that reallocations are taking place here, with money invested in fixed-income replacement products being exchanged for equity ETFs.

Popular investments in the sector ETF segment continue to be technology-related products such as Xtrackers AI & Big Data (IE00BGV5VN51) and WisdomTree AI (IE00BDVPNG13). "The topic is everywhere," explains Mohr. There is also good turnover in the healthcare sector (more purchases in Xtrackers MSCI World Health (IE00BM67HK77), more sales in Invesco Nasdaq Biotech (IE00BQ70R696)). In addition, the financials are "again trading quite well". While the Euro Stoxx Banks ETFs from Amundi (<LU1829219390) and iShares (DE0006289309) are mostly on the shopping lists, Mohr reports some sales in iShares S&P 500 Financials (IE00B4JNQZ49).

by Thomas Koch, 26 March?2024 ? Deutsche B?rse AG