ETFs: US stock markets “feel like minus 20 degrees”
Away with US equities in favor of European stocks - the trend of recent weeks has intensified. Tech ETFs, which have long been so popular, are also flying out of portfolios in a big way.
11 March 2025. FRANKFURT (Börse Frankfurt). The severe losses on Wall Street and the good state of the European stock markets are also reflected in the ETF market. “US, global and tech stocks are being sold heavily, while European stocks are being bought,” reports Andreas Schröer from Lang & Schwarz. “In previous years, lower prices were used to enter the market, but this is not the case now.” Frank Mohr from Société Générale also reports a clear selling overhang for US equities.
The commentators at Deutsche Bank speak of a “perceived minus 20 degrees” on the US stock markets. “Yesterday, the Nasdaq Composite suffered its biggest daily loss in two and a half years at 4 percent,” they say. The uncertainties surrounding US President Trump's erratic tariff policy have now been compounded by his comments on a possible recession in the US. The S&P 500 is now down 4 percent since the beginning of the year, while the Nasdaq 100 is down 7 percent. The DAX, on the other hand, has gained 14% since then.
European equities still favored
All traders are reporting high outflows for US equities. According to Mohr, the picture for global equities is still balanced. “However, this is probably due to the many savings plans.” Ivo Orlemann from ICF Bank also reports inflows and outflows in MSCI World trackers (DE000ETFL508, IE00B60SX394).
In contrast, European equities are clearly in demand. At Lang & Schwarz, for example, the Amundi Stoxx Europe 600 (LU0908500753) is well received, while at Société Générale the iShares ETFs on the Euro Stoxx 50 (DE0005933956), DAX (DE0005933931) and Stoxx Europe 600 (DE0002635307) as well as MDAX trackers from iShares and Invesco (DE0005933923, IE00BHJYDV33) are doing well.
Emerging markets back on the agenda
In addition to European equities, emerging market equities are also in demand, such as the iShares Core MSCI EM IMI (IE00BKM4GZ66) at Société Générale. “Chinese equities are in demand,” Schröer also notes with regard to the iShares MSCI China (IE00BJ5JPG56). At ICF, there is a lot going on in HSBC Hang Seng Tech (IE00BMWXKN31), albeit in both directions.
The high volatility is also driving turnover in leveraged ETNs. There is a lot going on at ICF in the WisdomTree NASDAQ 100 3x Daily Short (IE00BLRPRJ20), at Lang & Schwarz also in the WisdomTree NASDAQ 100 3x Daily Leveraged (IE00BLRPRL42).
“Tech ETFs with a lot of profit-taking”
Tech index funds are once again dominating trading in sector ETFs, although this time they are being kicked out of portfolios in a big way. According to Schröer, the iShares S&P 500 Information Technology Sector (IE00B3WJKG14) is affected, while Mohr also mentions Xtrackers MSCI World Information Technology (IE00BM67HT60) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51). “We are seeing a lot of profit-taking.”
Still extremely sought-after: defense ETFs such as VanEck Defense (IE000YYE6WK5) and Global X Defence Tech (IE000JCW3DZ3), as Orlemann reports. Another ETF with a focus on defense equipment, the WisdomTree Europe Defence (IE0002Y8CX98), is new to trading at ICF. “However, there is not much going on yet.”
Money market for “parking”, high turnover in crypto ETNs
According to Mohr, short-term bonds are in demand in the bond ETF segment, while long-term bonds are being sold. Money market ETFs such as Lyxor Smart Overnight Return (LU1190417599) and Xtrackers II EUR Overnight Rate Swap (LU0290358497) are being used for “parking”, as are short-dated US government bonds. Long-dated euro bonds, on the other hand, were sold.
Orlemann also reported high turnover for crypto ETNs such as the VanEck Bitcoin (DE000A28M8D0), the 21Shares Bitcoin Core (CH1199067674) as well as Ripple (CH0454664043) and Solana ETNs. Schröer also sees a lot of turnover. “These are all sales, even in the second and third tier currencies.” Cryptocurrencies are battered. Bitcoin even briefly slipped below the 80,000 US dollar mark, reaching 81,650 US dollars on Tuesday afternoon. Although US President Trump has now ordered the creation of a strategic crypto reserve, the details disappointed the scene.
By Anna-Maria Borse,11 March 2025, © Deutsche Börse AG
About the author
Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.
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