22/10/24 13:58:02

ETFs: `Both sides of crude oil are traded´

Oil ETCs and index funds on shares from the defense segment are being traded more heavily in the current environment. Gold and silver also remain in high demand, as traders report. In the case of cryptocurrencies, customers are mostly acting in the short term.


29 October 2024. FRANKFURT (Börse Frankfurt). October 22, 2024 FRANKFURT (Frankfurt Stock Exchange). Global equity ETFs remain in high demand ahead of the US presidential election in a week's time. Index funds such as the Invesco MSCI World (IE00B60SX394) and the Deka MSCI World (DE000ETFL508) are “always in demand”, according to Ivo Orlemann. The ICF Bank trader has also observed great interest in products on the US Nasdaq 100 index, with the corresponding ETF from Amundi (LU2197908721) being “a standard product that always does relatively well for us”. WisdomTree's triple-leveraged ETFs on the high-tech barometer are also heavily traded in this segment. Orlemann reports purchases on the long and short side (IE00BLRPRL42 and IE00BLRPRJ20 respectively).

In terms of sector and thematic ETFs, Leo Puschmann from Lang & Schwarz reports somewhat stronger activity in the energy utilities sector. The iShares Global Clean Energy (IE00B1XNHC34) in particular is being sold here. In return, Orlemann reports continued buying of VanEck Defense (IE000YYE6WK5), VanEck Uranium and Nuclear Technologies (IE000M7V94E1) and Global X Uranium (IE000NDWFGA5). All three index funds contain potential beneficiaries of the current military conflicts. “Regularly smaller turnovers” can be observed, which tends to speak in favor of portfolio additions.

As in the previous week, Lang & Schwarz's trading-affine clientele is very much focused on commodities, with brisk trading being observed on both sides of the market. The focus is on the oil price, following increased price fluctuations in the wake of Israel's retaliatory strike on Iran. Puschmann reports strong purchases of the WisdomTree WTI Crude Oil 3x Daily Leveraged (IE00BMTM6B32) and the WisdomTree Brent Crude Oil 3x Daily Short (IE00BLRPRK35).

Precious metals also continue to be an issue for clients. While the triple-leveraged long variant on gold (IE00B8HGT870) is traded at Lang & Schwarz, the “simple” ETCs from WisdomTree on gold (JE00B1VS3770) and silver (JE00B1VS3333) are primarily sought after at ICF Bank. The focus is also on gold mining stocks, which are added to the portfolio as share packages via VanEck Gold Miners (IE00BQQP9F84) and VanEck Junior Gold Miners (IE00BQQP9G91).

Ivo Orlemann

Ivo Orlemann

In the cryptocurrency segment, the ETF specialists are reporting somewhat quieter trading. “When we do, we see purchases,” explains Puschmann, citing WisdomTree Physical Bitcoin (GB00BJYDH287) as the top performer. This is also increasingly traded at Lang & Schwarz. The same applies to VanEck's counterpart (DE000A28M8D0). “We always have some turnover in both directions”. The trader is also seeing some transactions for WisdomTree Physical Ethereum (GB00BJYDH394) and VanEck Solana (DE000A3GSUD3), although Orlemann believes that customers are “primarily using the relatively high volatility for short-term trading”.

Demand for exchange traded funds has recently continued to rise. According to Morningstar's quarterly report “Global Flows in ETFs”, global assets in the ETF industry amounted to 13.4 trillion dollars at the end of September, almost 40% higher than the previous year's figure. More than a third of this increase is due to net inflows, with the remainder resulting from price increases. A new record year is on the horizon for the European ETF sector. According to initial estimates, net inflows in the first nine months of 2024 amounted to EUR 161 billion, taking total assets to over EUR 2 trillion for the first time ever. Demand for equity and bond ETFs has been particularly strong so far this year.

By Thomas Koch, October 29 2024, © Deutsche Börse

Thomas Koch is a CEFA investment analyst, investment specialist for structured products and a certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.

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