18/02/25 13:13:13

ETFs: European equities particularly in demand

Normally, US or global equities dominate turnover. This time, however, many are focusing on European equities. The tech and defense sectors are also still doing well, while profits are being taken in gold ETCs. 


18 February 2025 FRANKFURT (Frankfurt Stock Exchange). The stock markets continue to soar. The DAX and Stoxx Europe 600 reached new highs at the start of trading today. This is driving demand for equity ETFs. “However, turnover has declined somewhat,” reports Ivo Orlemann from ICF Bank. Holger Heinrich from Baader Bank also reports a slight decline in turnover - but still significantly more buys than sells.

The fact that European equities are currently performing better than US equities is shifting the weighting in ETF trading. “European equities are currently being traded slightly more actively than US equities,” explains Heinrich. The focus is mainly on large indices. On the buy lists: Euro Stoxx 50 (DE0005933956), Stoxx Europe 600 (FR0011550193) and also MSCI EMU Small Cap ETFs (IE00B3VWMM18). MDAX trackers (FR0011857234) with German SMEs and FTSE MIB ETFs with Italian equities are on the sell lists. “Dividend ETFs are also being sold,” adds the trader. Orlemann, on the other hand, sees a buying trend for MDAX and DAX trackers, for example from DekaBank (DE000ETFL441, DE000ETFL011). 

“US and World ETFs fall behind Europeans in trading” 

Heinrich describes trading in US equities as “somewhat more restrained”. ESG products such as the Amundi S&P 500 Equal Weight ESG Leaders (IE000LAP5Z18) are in demand here. World ETFs have also fallen somewhat behind the Europeans in trading. The MSCI World Screened (IE00BCHWNQ94) and the MSCI World Climate Paris Aligned (FR0014003FW1) were bought, while “somewhat more specialized products” such as the Invesco Quantitative Strategies ESG Global Equity Multi-Factor (IE00BJQRDP39) were sold. ICF has a more classic approach with inflows into the Deka MSCI World (DE000ETFL508) and the Invesco MSCI World (IE00B60SX394). 

Video game and e-sports providers also in demand

Tech trackers once again stand out in trading with sector ETFs. “It's all about Nasdaq ETFs, but also products such as the iShares S&P 500 Information Technology (IE00B3WJKG14),” explains Moritz Kretschmann from Lang & Schwarz. The VanEck Video Gaming and eSports (IE00BYWQWR46) is also in high demand at ICF. It focuses on companies that offer video games, e-sports or corresponding hardware or software. The defense industry remains a major topic. Extremely popular with the ICF: VanEck Defense (IE000YYE6WK5) and Global X Defense Tech (IE000JCW3DZ3). 

ETF boom continues. 

After many sales records in 2024, the European ETF market got off to a flying start in the new year, according to the trading and analysis company Crossflow: Just under 29 billion euros net flowed into ETFs and ETCs in January - the largest inflow in a January to date. Equity ETFs accounted for 22.2 billion euros, bond ETFs for 3.7 billion euros and gold products for a further 3 billion euros. 

Cash in on gold ETCs, crypto ETNs without direction

There is still a lot going on in gold ETCs. “However, it is now more of a sell-off,” reports Orlemann (IE00B579F325). The gold price reached a new all-time high last week, but is now below it again. According to Orlemann, there is also “always something going on” with crypto ETNs. Currently, it is mostly about Bitcoin, for example with the VanEck Bitcoin (DE000A28M8D0), or Solana, specifically with the 21Shares Solana Staking (CH1114873776). Bitcoin has been treading water for several weeks and is currently trading at USD 95,715, compared to a high of over USD 109,000 in January. 

Lifecycle ETFs now also available. 

Another innovation on the ETF market: the lifecycle funds known from actively managed funds are now also available in an ETF wrapper. Together with the Spanish CaixaBank, Amundi has launched four such multi-asset ETFs on the market with final maturities of 2030, 2033, 2036 and 2039. The proportion of equities in the portfolio is gradually reduced, while the proportion of bonds increases. The ETFs are based on FTSE indices and take ESG criteria into account when selecting securities. The management fees are 0.18 percent. 

By Anna-Maria Borse, 18 February 2025, © Deutsche Börse AG

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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