04/03/25 12:29:54

ETFs: European equities favored

For a long time, US and global equities were in particular demand, but now there is a lot of focus on European equities, including DAX and MDAX trackers. A big topic in sector index funds: defense ETFs. Crypto ETFs are also recording high turnover.


4 March 2025 FRANKFURT (Börse Frankfurt). The fact that Europe's stock markets are currently outperforming the US is also reflected in the ETF market. “We are seeing a lot of buying of European equities,” reports Moritz Kretschmann from Lang & Schwarz. Overall, there is a lot going on. “The strong price movements are making themselves felt,” explains Ivo Orlemann from ICF Bank. This is also due to geopolitical uncertainty: The higher US tariffs on imports from Canada, Mexico and China have been in force since today, Tuesday. In addition, US President Trump has now actually stopped military aid for Ukraine.

The DAX rose above 23,000 points for the first time yesterday, reaching a new all-time high of 23,308 points. In contrast, the US markets have tended to move downwards or sideways since the beginning of February. By midday on Tuesday, however, the DAX was only at 22,670 points again. 

Midcaps also a topic

Orlemann reports good demand for DAX (DE000ETFL011) and MDAX ETFs (DE000ETFL441). Kretschmann sees many purchases of the Amundi Stoxx Europe 600 (LU0908500753). The MDAX has lagged well behind the DAX in recent years, but is also clearly on the rise this year. Since the beginning of the year, the mid-cap index has risen by 11 percent.

MSCI World ETFs (DE000ETFL508, IE00B60SX394) are also in demand at ICF. However, after a long phase of almost exclusively buying, the picture is now more mixed: “There is also a lot of selling in MSCI World ETFs,” explains Lang & Schwarz trader Kretschmann.

According to Orlemann, dividend ETFs are also popular, such as the VanEck Morningstar Developed Markets Dividend Leaders (NL0011683594). This focuses on shares of companies from industrialized countries that are reliable dividend payers. The current focus is on HSBC, Verizon, Chevron, Pfizer and Roche.

Ivo Orlemann

Ivo Orlemann

NATO crisis drives defense stocks

There is also still a lot of focus on defense ETFs - with extremely high inflows. At ICF, it is primarily VanEck Defense (IE000YYE6WK5) and Global X Defence Tech (IE000JCW3DZ3), while at Lang & Schwarz it is VanEck Defense and the Future of Defense from HANetf (IE000OJ5TQP4). All three have just reached new all-time highs in the wake of the expected rearmament in Europe. “The geopolitical situation is making itself felt,” says Kretschmann. VanEck Semiconductor (IE00BMC38736) and VanEck Space Innovators (IE000YU9K6K2) are also doing well at the ICF.

VanEck's Defense ETF provides access to leading defense technology companies, large cybersecurity firms and defense-related service providers. The current focus is on Thales, Leonardo, Palantir, Hanwha Aerospace and Leidos. 

Financial sector tops the list. 

The five best sector indices for ETFs since the beginning of the year are all indices for the financial sector, as an overview by the ETF platform justETF shows. In first place is the Euro Stoxx Banks 30-15, which has gained 29% since the beginning of the year. It is followed by the Euro Stoxx Banks, the Euro Stoxx Optimized Banks, the Stoxx Europe 600 Banks and the Stoxx Europe 600 Optimized Banks with gains of between 26 and almost 29 percent. 

Ups and downs for cryptocurrencies

There is also a lot going on in crypto ETN trading. Bitcoin fell below USD 80,000 last week and rose above USD 94,000 at the weekend following statements by US President Trump on a strategic cryptocurrency reserve. By midday on Tuesday, however, it was back down to just USD 83,600.

Orlemann reports high turnover for VanEck Bitcoin (DE000A28M8D0), but also for Ripple (CH0454664043) and Solana ETNs. Kretschmann also sees a lot of turnover in Bitcoin and Ripple ETNs. In addition to Bitcoin, Trump had also mentioned Ethereum, Ripple, Solana and Cardano as possible reserve currencies. 

By Anna-Maria Borse, 3 March 2025, © Deutsche Börse AG

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

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