04.02.25 13:09:52

ETFs: Growing doubts about the US tech party

Index funds remain in demand - despite recent turbulence on the market. Only tech ETFs are showing growing skepticism, with some profit-taking. Gold price trackers are currently very popular. 


4 February 2025 FRANKFURT ((Börse Frankfurt). First DeepSeek, then US tariffs - but the stock markets have not been permanently shaken. The fact that US President Trump is making good on his threat of tariffs seems to have been quickly digested. The ETF market is also still in a buying mood. “Buying is predominant,” reports Frank Mohr from Société Générale. “We are only seeing profit-taking in technology stocks, which have been so popular for a long time.” Holger Heinrich from Baader Bank reports around 40 percent more buying than selling and “significantly increasing” turnover. According to Leo Puschmann from Lang & Schwarz, there is also a lot going on in gold ETCs - due to the new gold price record.

The DAX, which had reached a new all-time high of 21,800 points on Friday and then fell below 21,300 points, was already back at 21,430 points by midday on Tuesday. The situation is similar for the Stoxx Europe 600. The US stock markets also recovered on Monday after initially suffering heavy losses.

Cold feet regarding the AI winners

However, the news about China's extremely powerful AI model DeepSeek was not entirely without consequences. “Interestingly, the major US indices such as the Nasdaq 100 (LU1681038599) and MSCI USA (IE00B52SFT06) are being sold,” notes Heinrich. In contrast, minimum volatility trackers such as the iShares Edge S&P 500 Minimum Volatility (IE00B6SPMN59) and dividend ETFs such as the Xtrackers MSCI North America High Dividend Yield (IE00BH361H73) are being bought. According to Mohr, inflows into MSCI USA and S&P 500 ETFs still dominate, but profits are being taken on special tech ETFs.

As far as World ETFs are concerned, Mohr also sees mostly purchases, but also sales. According to Heinrich, ESG products are now in demand again, such as the Deka MSCI World Climate Change ESG (DE000ETFL581) and the JPM Global Research Enhanced Index Equity (ESG) (IE0000UW95D6). The latter is an active ETF that aims to outperform the MSCI World. According to Heinrich, things are quieter with European equities. “Here, too, ESG ETFs (IE00BFNM3D14, IE00BHZPJ015, DE000A0Q4R69) are in demand again,” he notes. 

Active ETFs increasingly popular.

With the active JPMorgan US Research Enhanced Index (ESG), an active ETF has made it into the top 10 ETFs with the highest inflows of funds for the first time in 2024, as the analysis company Crossflow reports. “In general, active ETFs are currently the number one topic in the European ETF market,” it says. Active equity ETFs were able to increase their assets by 137 percent in 2024 with sales of EUR 12.3 billion - to EUR 33.2 billion. “For the first time, active equity ETFs collected more net assets in 2024 than sustainable equity ETFs on the former ESG megatrend, which amounted to EUR 11 billion.”

Indian and Japanese shares: Better not to buy

According to Puschmann, Indian equities, which have been popular for a long time, are currently being sold off. Measured by the MSCI India, the Indian stock market had performed very well until the summer of 2024, then treaded water and lost more ground in December and January. According to Mohr, MSCI Japan ETFs, such as those from UBS (LU0136240974), which are otherwise not heavily traded, are also on the sell-off lists.

“Mixed picture for tech ETFs”

In trading with sector ETFs, the growing skepticism towards tech stocks is even more evident. “The picture is now mixed with buying and selling,” reports Mohr. High turnover: iShares S&P 500 Information Technology (IE00B3WJKG14), Xtrackers MSCI World Information Technology (IE00BM67HT60) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51). Healthcare and energy infrastructure ETFs (IE00B94ZB998) also recorded high turnover, both with a trend towards more purchases.

Gold mining ETFs are also popular due to the rise in the gold price, such as VanEck Gold Miners (IE00BQQP9F84) at Lang & Schwarz and iShares Gold Producers (IE00B6R52036) at Société Générale. 

US bonds in demand, euro bonds not

US Treasuries are also in demand, namely short and medium maturities, as Mohr reports. Bonds from the eurozone, including corporate bonds, are mostly being sold off.

Popular Gold ETCs, Crypto ETNs “rather quiet”

The fact that the price of gold is rising and rising is stimulating business with gold ETCs. “We are seeing significantly more turnover and mostly purchases,” explains Puschmann. Particularly popular: the iShares Physical Gold (IE00B4ND3602). The price of a troy ounce recently climbed to a new historic high of USD 2,830.47.

Bitcoin, on the other hand, has not yet reached its all-time high of USD 109,000 from December. After some turbulence thanks to DeepSeek and customs concerns, the most important cryptocurrency currently costs USD 98,800. “Despite the movement, trading in crypto ETNs is rather quiet, with buying and selling in equal measure,” reports Puschmann.

By Anna-Maria Borse, 4 February 2025, © Deutsche Börse AG

Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.

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