12/11/24 13:38:48

ETFs: “America first” also in ETF trading

The Trump election victory is fueling US stock markets and cryptocurrencies - corresponding ETFs and ETNs are in demand like never before. Most of them are S&P 500, Nasdaq or MSCI USA products, often with leverage.


12 November 2024 FRANKFURT (Frankfurt Stock Exchange). S&P 500, Nasdaq, Bitcoin - new all-time highs for US equities and cryptocurrencies continue to dominate ETF trading. Ivo Orlemann from ICF Bank speaks of a strongly “America-heavy business”, with mostly purchases. Holger Heinrich from Baader Bank also reports a clear buying overhang in equity ETFs, especially US equity ETFs, with increased turnover. “We are seeing a lot of activity, mostly purchases, namely of equity ETFs and crypto ETFs,” Andreas Schröer from Lang & Schwarz also reported.

The US stock markets have been climbing to new heights since Donald Trump's election last week. The Dow Jones, S&P 500 and Nasdaq 100 reached new record highs during the course of the day yesterday, Monday. The DAX remained stable despite the traffic light switch-off and tariff threats and stood at 19,280 points at midday on Tuesday. 

Almost only buys

The Invesco MSCI USA (IE00B60SX170) and the Amundi Nasdaq 100 (LU2197908721) are very well received, as Orlemann notes. According to Baader Bank, Xtrackers ETFs on the S&P 500 (LU2009147757), S&P 500 Equal Weight (IE000IDLWOL4) and MSCI USA ESG (IE0000MMQ5M5) are in demand, as are MSCI USA Quality ETFs (IE00BWT3KN65). Also popular: small cap trackers, such as the S&P Small Cap 600 ESG (IE000XLJ2JQ9) and the Russell 1000 Growth (IE0005E8B9S4).

However, S&P 500 and Nasdaq trackers with leverage are also in high demand, as traders have observed. Examples include the WisdomTree Nasdaq 100 3x Daily Leveraged (IE00BLRPRL42) and the WisdomTree Nasdaq 100 3x Daily Short-ETN (IE00BLRPRJ20). 

Historically high inflows into US equities

Products that track US equities were already a big hit on the European ETF market in October. “In the month before the US election, local investors quickly invested EUR 10 billion in ETFs with US equity indices, a historic high in this category,” reports the trading and analysis company Crossflow. This means that flows into US equities accounted for by far the largest share of the total inflows of EUR 19.7 billion in October. Investors were probably relying on the performance of US companies or speculating on share price rises in light of plans to cut taxes, reduce regulation and impose protective tariffs. “Today we know that the speculation paid off, at least in the short term,” comments Crossflow. Since the beginning of the year, however, global equities (60.4 billion euros) are still ahead of North American equities (54 billion euros). Read more: www.crossflow.de/wp-content/uploads/2024/11/2024_10_KnowtheFlow-2.pdf

MSCI World: Popular because of US equities

MSCI World trackers are also well received. “There's a lot of US in there,” notes Schröer from Lang & Schwarz. In fact, US equities made up 73 percent of the MSCI USA at the end of October. Heinrich is surprised that the previously unpopular ESG-related MSCI World ETFs are being bought again. Dividend ETFs are also in demand. “Europe ETFs were less in focus,” Heinrich also explains. Dividend ETFs were also bought here, while MSCI Europe trackers were sold. ICF reported the usual turnover in DAX ETFs such as the Deka DAX (DE000ETFL011) and the Deka DAXplus Maximum Dividend (DE000ETFL235).

China's equities also continue to attract a lot of attention. “However, we are buying and selling here, for example with the iShares MSCI China (IE00BJ5JPG56),” says Schröer.

In trading with sector ETFs, Orlemann continues to focus on VanEck Defense (IE000YYE6WK5). The rapid rise of Bitcoin & Co is also boosting demand for blockchain shares. “We are seeing significant buying,” explains Schröer with regard to VanEck Crypto and Blockchain Innovators (IE00BMDKNW35). 

High-turnover Euro Stoxx tracker

The most traded ETF in Deutsche Börse's ETF segment in October was the iShares Core Euro Stoxx 50, followed by the iShares Core MSCI World and the money market tracker Xtrackers II EUR Overnight Rate Swap. The iShares Core S&P 500, the iShares Core DAX, the Vanguard FTSE All-World, the Xtrackers DAX and the iShares MSCI ACWI also recorded high turnover. The best-selling sector ETFs were the iShares S&P 500 Information Technology and the iShares Stoxx Europe 600 Basic Resources.

Rush in the crypto business

Traders also have their hands full in the crypto ETN business. Mostly Bitcoin (DE000A28M8D0), but also Solana, Ethereum and Ripple ETNs as well as crypto baskets. “It's mostly buying, but also some profit-taking,” reports Orlemann. Schröer also reports brisk trading with many purchases, for example for the 21Shares Solana Staking (CH1114873776). Bitcoin costs 88,000 US dollars at midday on Tuesday, compared to less than 70,000 US dollars before the election result was announced, Solana 215 after 158 US dollars.

By Anna-Maria Borse, 12 November 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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