22/10/24 13:58:02

ETFs: “Gold and silver are a big topic”

Turnover in mining ETFs and gold and silver ETCs is currently conspicuously high, as traders report. These are mostly purchases. As always, S&P 500 and MSCI USA trackers are also proving popular. No longer so popular: money market ETFs.  


22 October, 2024 FRANKFURT (Frankfurt Stock Exchange). New all-time highs on the stock markets are constantly boosting ETF trading, but the gold and silver price rally is also generating a lot of turnover in mining ETFs and gold and silver ETCs. “Precious metals are the big topic at the moment,” explains Ivo Orlemann from ICF Bank. “Silver ETCs recorded some of the largest inflows ever. That is quite unusual,” reports Matthias Präger from Baader Bank. “There is a lot of betting on the price of gold and silver, sometimes with and sometimes without leverage,” reports Leo Puschmann from Lang & Schwarz.

The gold price is currently rushing from record to record. Most recently, a new record of 2,740 US dollars per troy ounce was reached. At 2,733 US dollars on Tuesday afternoon, it is hardly less. The price of silver also rose sharply. Orlemann mainly reports purchases for mining ETFs such as the VanEck Junior Gold Miners (IE00BQQP9G91) and the Global X Silver Miners (IE000UL6CLP7). These have seen price gains of over 75% since the end of February.

There is also a lot going on in precious metal ETCs, such as gold and silver from Invesco (IE00B579F325, IE00B43VDT70) or WisdomTree (JE00B1VS3333) - with mainly purchases, according to Orlemann. At Baader Bank, a lot is happening in Xetra-Gold (DE000A0S9GB0). “But there is buying and selling here,” Präger notes. In contrast, he registered extremely high inflows into Xtrackers Physical Silver (DE000A1E0HS6). Lang & Schwarz's trading-savvy clients also like to invest in ETCs with leverage, specifically the WisdomTree Gold 3x Daily Leveraged (IE00B8HGT870) and its short version (IE00B6X4BP29) as well as the corresponding products on silver.

“Normal purchases” for equity trackers

Business with traditional equity ETFs is as usual. Orlemann from ICF speaks of the “usual demand” for MSCI World ETFs, for example from Invesco (IE00B60SX394), Puschmann from Lang & Schwarz of “normal purchases” for Nasdaq and S&P 500 ETFs. At Baader Bank, the main focus is on S&P 500 and MSCI USA ETFs, with inflows into the iShares Core S&P 500 (IE0031442068) and the Amundi Leveraged MSCI USA Daily (FR0010755611), for example, but also outflows from S&P ETFs of other issuers. “We are also seeing both directions with DAX ETFs,” adds Präger.

According to Puschmann, ETFs that track China's stock market, which have been heavily traded in recent weeks, have become quieter. “Indian shares are still being bought, but not as much as a few weeks ago,” he also notes.

According to Orlemann, sector ETFs such as VanEck Defense (IE000YYE6WK5) and VanEck Uranium and Nuclear Technologies (IE000M7V94E1) continue to be popular. “These benefit from the numerous wars,” notes Orlemann. 

Ivo Orlemann

Ivo Orlemann

Thematic ETFs: Not all are convincing

With thematic ETFs, it all depends on the theme. ETFs focusing on robotics, automation and AI achieved the highest inflows this year (up to the end of September), as reported by issuer ARK Invest. They received 706 million US dollars. Smart grid (USD 281 million), uranium, innovations in healthcare and sustainable infrastructure also saw inflows, albeit significantly lower, at around USD 90 million each. In contrast, there have been outflows of a whopping USD 742 million from cyber security and around USD 600 million each from electric vehicles/batteries and clean energy since the start of the year. A lot of money also flowed out of the topics of ageing populations (USD 305 million) and digitalization (USD 204 million). 

Money market ETFs with sales, cryptos without direction

According to Präger, the high outflows from the money market ETFs that have long been so popular, such as the Xtrackers II EUR Overnight Rate Swap (LU0335044896) and its US dollar variant (LU0321465469), are currently striking. “These are at the top of our list of biggest sellers.”

Crypto ETNs are sometimes bought, sometimes sold, with normal to good turnover, as traders report. According to Orlemann from ICF, there is a lot going on in the Invesco ETNs on Bitcoin, Ethereum and Solana. Bitcoin has recently made some gains and is currently trading at USD 66,924.

By Anna-Maria Borse, October 22, 2024, © Deutsche Börse

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

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