Despite the widening correction, the majority of equity ETFs are still being bought. Profit-taking predominates in gold ETCs. There has been a clear favorite in the thematic ETF segment for months.
16 April 2024. FRANKFURT (Börse Frankfurt). Turnover has settled at a normal level," notes Frank Mohr from Société Générale. The trader finds it interesting that the number of buyers continues to predominate in the current environment. A trend confirmed by Holger Heinrich from Baader Bank: "Although the stock markets were weaker again last week, we saw around 50 percent more buying than selling with reduced turnover. European ETFs accounted for the lion's share this time. Investors once again focused on country indices such as the DAX or the FTSE 250 (DE000A2QP331 , IE00BKX55Q28).
At Société Générale, US and World ETFs together account for 70 percent of total turnover. While index funds on the S&P 500 (IE00B5BMR087, IE00B3XXRP09, LU0496786574) are bought by the majority, the distribution for the iShares Core MSCI World (IE00B4L5Y983) is balanced. Traders are even seeing "strong selling" in the currency-hedged iShares MSCI World Euro Hedge (IE00B441G979). Sales also predominate in ETFs with a focus on German equities. At Baader Bank, Heinrich also noted purchases of short indices that benefit from falling DAX prices, for example (LU2572257041).
Artificial intelligence remains the dominant theme
Demand for thematic ETFs continues to be driven by the euphoria surrounding the possibilities of artificial intelligence. Mohr reports "strong turnover and a clear buying overhang" in Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51) and the Amundi MSCI Robotics & AI ESG Screened (LU1861132840). In second place at Société Générale this time is the Real Estate segment, where, however, sales are mainly observed. Both the iShares European Property Yield (IE00B0M63284) and the iShares US Property Yield (IE00B1FZSF77) were sold the most.
According to a recent analysis by ARK Invest Europe, European thematic ETFs saw capital outflows of USD 304 million in March. This brought total outflows in the first quarter to around 366 million dollars. Sales were particularly strong in the areas of cyber security (303 million dollars), clean energy (249 million dollars) and e-vehicles and batteries (236 million dollars). ETFs relating to robotics, automation and AI, on the other hand, recorded strong inflows, with inflows totaling USD 952 million since the turn of the year. This represents 69% of total net inflows in the year to date. Themed ETFs on innovation in the healthcare sector (147 million dollars) and smart cities (78 million dollars) followed in second and third place.
Brisk trading in crypto ETNs and gold ETCs
ICF Bank's clients continue to take advantage of the strong price movements in cryptocurrencies and precious metals for active trading. "There's a lot going on with cryptos," reports Jan Duisberg. The cryptocurrency Solana has been under heavy pressure since the beginning of the month, at times losing 40% of its previously rapid and sharp rise in value. As a result, there was a lot of turnover in the Solana ETNs from 21Shares (CH1114873776) and VanEck (DE000A3GSUD3). "Both were initially sold off and then immediately sought after again," says the trader, describing what happened. He also reports rain trading in the 21Shares Crypto Basket (CH0445689208).
Sustained demand for short-dated bond ETFs
There is also good demand for bond products at ICF Bank. Duisberg sees "very good turnover and mostly buyers" in the Xtrackers II EUR Overnight Rate Swap ETF (LU0290358497). Mohr also speaks of a "clear buying overhang" here. In the counterpart from Amundi (FR0010510800), the ratio is relatively balanced. Overall, the products often bought as a substitute for fixed-term deposits remain in high demand, which according to Mohr is also reflected in the strong interest in the Vanguard U.S. Treasury 0-1 Year Bond (IE00BLRPPV00). This ETF is currently benefiting not only from higher interest rates in the US, but also from the strength of the US dollar against the euro.
By Thomas Koch, 16 April 2024 © Deutsche Börse AG
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