To The Moon

Interest in ETFs continues to grow. Equity products in particular are being purchased. However, crypto and bond ETFs are also on customers' shopping lists.  

5. March 2024. FRANKFURT (Börse Frankfurt). The rising share prices over the past few months have also awakened appetite in ETF trading. "Turnover has risen sharply in recent weeks," says Jan Duisberg, trader at ICF Bank. Frank Mohr from Société Générale also reports "great interest from customers and very high volumes". Buyers are clearly in the majority with an unusually high share of 62%. The situation is similar in trading at Baader Bank. "With increased turnover, we recorded around 80 percent more purchases than sales," summarizes senior trader Holger Heinrich. 

Strong demand for various equity ETFs

As usual at the beginning of the month, the execution of savings plans played an important role in turnover. As a result, the focus was primarily on the major share indices. According to Mohr, the MSCI World ETFs from iShares (IE00B4L5Y983) and the S&P 500 ETF (IE00B5BMR087) from the same provider were particularly popular. The SPDR S&P 500 (IE00B6YX5C33), known as the "Spider", is also becoming increasingly popular as the sector's flagship fund. "A lot of money has been flowing in here since the cost reduction in November," explains Mohr. While global and US ETFs account for around 70 percent of trading at Société Générale, Baader Bank's customers are focusing on ETFs from the eurozone this time. "People are buying across the board here," reports Heinrich. In addition to traditional eurozone products such as the iShares STOXX Europe 600 (DE0002635307) and the Amundi ETF STOXX Europe 50 (FR0010790980), country indices are also in demand. The trader cites the Amundi DAX III (LU2090062436), the Vanguard FTSE 100 (IE00B810Q511) and the iShares MDAX (DE000A2QP349) as examples. "Investors even took up leveraged products such as the WisdomTree EURO STOXX 50 3x Daily Leveraged (IE00B7SD4R47)".

Artificial intelligence is sought and found

In trading with thematic ETFs, technology-related products remain at the forefront. "Everything related to artificial intelligence or semiconductors is being bought," summarizes Duisberg. He has seen good turnover in the L&G Cyber Security (IE00BYPLS672) and the HSBC Hang Seng TECH (IE00BMWXKN31), for example. "In addition, the L&G Battery Value Chain (IE00BF0M2Z96) is something of a perennial favorite with us."  Mohr registered strong turnover with Xtrackers MSCI World Information Technology (IE00BM67HT60) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51), which has been very popular for months. Clients are also keeping an eye on the healthcare sector. "The sector is repeatedly cited by analysts as a potential AI profiteer," says the Société Générale trader, explaining the background. While the majority of Xtrackers MSCI World Health Care (IE00BM67HK77) was bought, iShares Healthcare Innovation (IE00BYZK4776) also saw profit-taking last week.

Crypto-ETN has "real music in it"

There is great interest in Krypro products thanks to the current rally. "Turnover here has increased more than we could have dreamed of. There's real music in it," says Duisberg, positively surprised. VanEck's ETNs on Bitcoin (DE000A28M8D0) and Ethereum (DE000A3GPSP7) are being bought in particular. Smaller cryptocurrencies also remain an issue, as shown by demand for 21Shares Solana (CH1114873776) and 21Shares Polygon (CH1129538448), which have risen sharply since October.  Duisberg now sees the approval of the first Bitcoin spot ETFs by the US Securities and Exchange Commission as a "game changer", as it has raised hopes of institutional clients entering the market. "This is being speculatively anticipated," explains the trader, who therefore does not want to rule out "blatant movements and exaggerations" in this already very volatile segment in the future.

Emerging

The blockchain technology behind cryptos is also seen as promising by investors. This is supported by purchases of products such as the VanEck Crypto and Blockchain Innovators (IE00BMDKNW35) or the WisdomTree Blockchain (IE000940RNE6). "In the long term, the technology can bring considerable relief in many areas," says Mohr enthusiastically. Another topic, which is certainly also very exciting in the long term, is taking a back seat. The Xtrackers MSCI Global Clean Water & Sanitation (IE0007WJ6B10) saw major losses. Although equity ETFs are currently playing the main role in trading (approx. two thirds of turnover), there are also large purchases on the bond side. Mohr mentions money market products such as Xtrackers II EUR Overnight Rate (LU0290358497) and Amundi EUR Overnight Return (FR0010510800) in particular. He has also observed increased activity in the Amundi Euro Government Bond 1-3Y (LU1650487413), which targets short-dated bonds.

ETF trading on Xetra

Equity ETFs World: Purchases USA: Purchases Europe/Germany: Purchases

Bond ETFs Money market: Purchases

Sector ETFs Technology: Purchases Healthcare: Purchases/Sales Blockchain: Purchases clean water: Sales

Crypto ETNs: Purchases

By Thomas Koch, 5. March 2024 © Deutsche Börse AG