ETFs: “All eyes on the Nasdaq”
The Nasdaq tech index is now 8 percent below its all-time high. However, few on the ETF market are deterred by this. The buying mood is also continuing for equity ETFs in general. There is also a buying mood for crypto trackers.
30 July 2024. FRANKFURT (Börse Frankfurt). The big sell-off in tech stocks has not been reflected in ETF trading. “We are seeing buying and selling - and at most a small selling overhang,” reports Frank Mohr from Société Générale. According to Leo Puschmann from Lang & Schwarz, inflows are still dominating.
Last week, the tech index Nasdaq lost significantly once again. At the end of the week and on Monday yesterday, however, things were calmer. However, at 19,059 points, the Nasdaq 100 is still 8 percent below its all-time high reached around three weeks ago. By contrast, at 18,392 points on Tuesday morning, the DAX remained within the range of 18,000 to just under 18,900 points that has prevailed since May.
“Profits are sometimes taken”
Global and US equities (IE000XZSV718) are once again showing high turnover, with a buying overhang, as Mohr reports. “But that doesn't mean that profits aren't being taken from time to time.” The picture is clearer for ETFs that track European equities. “We are seeing significantly more buying here.”
Frank Wöllnitz from ICF Bank recognizes particular interest in Nasdaq ETFs at best. Lang & Schwarz's trading-savvy clients also like to invest in Nasdaq ETFs with leverage. “This is probably due to the increased volatility on the Nasdaq,” says Puschmann. He sees brisk turnover for the five-fold leveraged Nasdaq trackers issued by Wisdom Tree in May, long (XS2771642134) and short (XS2771611840). However, the “old” variants with leverage 3 (IE00BLRPRL42, IE00BLRPRJ20) also remained popular. An ETN that leveraged Tesla's share price performance, the Leverage Shares 3x Tesla-ETN (XS2757381400), was also in high demand at ICF. “We saw a lot of buying after Tesla's share price collapsed,” explains Wöllnitz.
Mohr
ETNs (Exchange Traded Notes) are a modified form of ETFs. They can be used to invest in currencies and volatilities, but also in other more unusual asset classes. Unlike ETFs, ETNs are not special assets but debt securities and, as an investment, are associated with the risk that the issuer may default as a debtor.
According to Puschmann, Indian equities remain popular, specifically the iShares MSCI India (IE00BZCQB185). The ETF has continued its upward trend and is now up 22% since the beginning of the year.
Successful tech, renewed interest in financial ETFs
In trading with sector ETFs, tech trackers continue to account for by far the highest turnover, as Frank Mohr explains. However, both sides are now being played. He is still seeing clear inflows for some ETFs, such as the iShares S&P 500 Information Technology Sector (IE00B3WJKG14) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51). However, other tech ETFs would be sold, such as the Amundi MSCI World Information Technology (LU0533033667). According to Puschmann, tech ETFs from iShares and Xtrackers are also still on the shopping lists. Also in demand: the VanEck Crypto and Blockchain Innovators (IE00BMDKNW35). The tech ETFs from iShares and Xtrackers are up 26% and 17% respectively this year.
“The high turnover of financial ETFs is striking - with almost only purchases,” Mohr also reports. “This applies not only to banks, but also insurance companies.” The Amundi S&P Global Financials ESG (IE000ENYES77), for example, has been well received.
Lots of movement in crypto and silver
The fact that US presidential candidate Donald Trump is increasingly showing himself to be a crypto fan is stimulating trading in crypto ETNs. Puschmann is seeing purchases of Bitcoin and Ethereum ETNs (DE000A27Z304, CH0454664027). But crypto baskets (CH0445689208) are also in demand. Following the assassination attempt on Trump on July 13, Bitcoin rose to over USD 68,000; it currently stands at USD 66,519.
There is also a lot going on with commodity ETCs. “There is real pressure on silver ETCs,” says Wöllnitz, referring to WisdomTree Physical Silver (JE00B1VS3333). The price of silver has fallen significantly in the past two weeks to below 28 US dollars recently.
From Anna-Maria Borse, 30 July 2024, © 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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