ETFs: Price weakness used to buy

Equity ETFs are still in demand, including those with a country focus such as India, France or Italy. Another important topic is the rapid rise in the price of gold. This is leading to high demand for gold mining ETFs and ETCs.? ?

9?April?2024. FRANKFURT (B?rse Frankfurt). Price setbacks on the stock markets are not dampening the good mood in the ETF business. "Although the stock markets went into reverse, investors took the opportunity to get in," reports Heinrich Holger from Baader Bank. He sees almost twice as many purchases as sales with slightly higher turnover. Frank Mohr from Société Générale reports a sustained high volume and also significantly more buying. According to Leo Puschmann from Lang & Schwarz, gold mining ETFs and gold and silver ETCs are also very popular at the moment - due to the sharp rise in the price of both precious metals.?

The DAX stands at 18,178 points at midday on Tuesday, some way below the new all-time high of 18,571 points reached at the end of March. The Dow Jones and Nasdaq 100 are also below their recent highs.

CAC40, FTSE MIB and ATX also popular

World trackers in particular are in demand at Société Générale, especially the iShares Core MSCI World (IE00B4L5Y983), but also the Vanguard FTSE All-World (IE00B3RBWM25). "This is due to the start of the month and the many savings plans," notes Mohr. He also sees a clear buying overhang for US equities, while both sides are being played for European equities.? At Baader Bank, MSCI World ETFs are in the shadows this time. "Investor interest was mainly spread across ETFs from the USA and Europe," Heinrich notes. Particularly popular: Nasdaq trackers, for example from DekaBank (DE000ETFL623) or currency-hedged from Amundi (<LU16810385990>). Dividend strategy ETFs (IE00BYTH5R14) and small cap trackers (IE000XLJ2JQ9) are also in demand. As far as European equities are concerned, Heinrich registered high inflows into individual country indices such as France's CAC40, Italy's FTSE MIB or Austria's ATX (IE00B53L4X51, LU0659579063). Momentum strategies, ESG products and mid-caps were also well received. Lang & Schwarz also continues to focus heavily on Indian equities with the iShares MSCI India (IE00BZCQB185).?

The European ETF market recorded inflows of USD 11.4 billion in March, as reported by issuer SPDR. The majority was once again accounted for by equity ETFs (USD 9.9 billion) and USD 1.2 billion by bond ETFs. "The market environment of continued high interest rates and a robust US economy led to inflows of around USD 900 million into US small caps such as the Russell 2000 and the S&P 400 in addition to inflows into the classic equity ETFs such as the S&P 500 and MSCI World," explains Sophia Wurm from SPDR. At sector level, cyclical sectors benefited, such as European banks, US IT and semiconductors. In the area of bond ETFs, money market solutions, short-dated bonds and high-yield bonds were in demand. "Corporate bonds with good credit ratings and longer maturities as well as inflation-linked bonds were affected by significant outflows in some cases."

Tech enthusiasm continues, money market ETFs also popular?

Tech stocks continue to take center stage in trading with sector ETFs. "We are mainly seeing purchases, but not quite as many as before," notes Puschmann. Mohr continues to report high inflows, for example into the Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51) and the iShares S&P 500 Information Technology Sector (IE00B3WJKG14).? According to Mohr, money market products continue to be magnets in bond ETF trading, especially the Xtrackers II EUR Overnight Rate Swap (LU0290358497) and the Lyxor Euro Overnight Return (FR0010510800). For short-dated euro government bonds, Mohr sometimes observes purchases (DE000ETFL185), sometimes sales.

Gold price higher and higher, crypto rally calms down somewhat

The sharp rise in the gold price is also leading to strong inflows into gold mining ETFs and gold and silver ETCs. According to Mohr, the iShares Gold Producers (IE00B6R52036) and VanEck Junior Gold Miners ETF (IE00BQQP9G91) are being bought a lot. The Invesco ETF is also well received at Lang & Schwarz. Puschmann is also seeing a lot of buying for ETCs such as Xetra-Gold (DE000A0S9GB0) and multi-leveraged gold and silver price trackers (IE00B8HGT870, IE00B7XD2195, <IE00B2NFTS64>).?

The price of gold has been rising to new records almost every day since March, with a troy ounce costing USD 2,364 today (Tuesday), the highest price ever. The price of silver is also continuing to climb.? Trading in the crypto ETNs, which have seen extremely high turnover in previous weeks, has at least quietened down somewhat, as Puschmann notes. Bitcoin is currently trading at USD 70,514, after setting a new record of USD 73,559 in mid-March.?

By Anna-Maria Borse, 9?April 2024 ? Deutsche B?rse AG