10/12/24 13:24:36

ETFs: “Huge confidence in the US market”

The party mood on the stock markets continues - and there is a lot going on in ETF trading. It's all about US equities, which have become even more popular since Trump's election victory. But there is also a lot going on around crypto ETNs. 


10. December 2024 FRANKFURT (Frankfurt Stock Exchange). The DAX and US stock markets have lost some momentum after last week's record run. But there is still a lot to do in ETF trading. Frank Mohr from Société Générale reports trading volumes well above average. “It's mainly purchases, especially of MSCI World and USA ETFs,” he notes. Holger Heinrich from Baader Bank also reports increased turnover - and twice as many purchases as sales, with a focus on the S&P 500 and Nasdaq. “Once again, however, the music is playing in the crypto ETNs,” adds the trader. At Lang & Schwarz, too, a lot is still revolving around MSCI World and S&P 500 trackers as well as crypto ETNs, as Moritz Kretschmann observes.

The DAX stood at 20,352 points at midday on Tuesday, below the most recent all-time high of just under 20,462 points. Bitcoin is also slightly weaker. It is currently trading at USD 97,792, having reached a new record of USD 103,499 last Thursday. 

Purchases dominate by far

The products with the highest turnover at Société Générale are MSCI World and S&P 500 ETFs from iShares (IE00B4L5Y983, IE00B5BMR087) - with mostly purchases. Kretschmann from Lang & Schwarz is also seeing a lot of buying for S&P 500 and MSCI World trackers. At Baader Bank, the focus is also mainly on products on large indices, such as the iShares Core S&P 500 (IE00B5BMR087) and the iShares Nasdaq 100 (IE00B53SZB19). “Investors are also focusing on the Amundi Leveraged MSCI USA Daily (FR0010755611), which is notorious in the Reddit community,” adds Heinrich. The Amundi ETF tracks the performance of the MSCI USA with leverage 2. It therefore offers greater upside opportunities, but also entails greater downside risks.

According to Mohr, both sides are played in DAX ETFs, for example from Xtrackers (LU0274211480) or iShares (DE0005933931). There is also a lot going on in ETFs with access to Asian equities, as Kretschmann observes. “However, we are seeing both buying and selling.” 

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US shares most popular - by far

November saw another record in net inflows on the European ETF market, as Crossflow reports. “While a new monthly record of 25 billion euros was already set in October, November brought the next historic record of 27.5 billion euros,” explains the analysis and trading company. Once again, this was mainly due to US equities. The trend, which has been ongoing since July 2024, intensified once again after the US election. According to Crossflow, over 110 billion euros of the total 158 billion euros in inflows into equity ETFs have flowed into US companies since the beginning of the year - 71 billion euros into pure US indices and 42 billion euros into global indices that heavily weight US equities. 

Should I buy Crypto ETFs or Industrial

Tech sector accounts for 40 percent of sales

In the sector ETF business, tech ETFs once again stand out. At Société Générale, they account for 40 percent of turnover, with the healthcare sector a distant second at 8 percent. “These are mostly purchases of tech ETFs, but we are also seeing sales of some products,” says Mohr. The iShares MSCI World Information Technology (IE00BJ5JNY98) and Xtrackers Artificial Intelligence & Big Data (IE00BGV5VN51) are on the buy lists, while the Xtrackers MSCI World Information Technology (IE00BM67HT60) is on the sell list. 

Back and forth in Money Market Trackers

Mohr reports that money market ETFs, such as Lyxor Smart Overnight Return (LU1190417599), continue to see high turnover, with inflows and outflows in equal measure. He also observed outflows from European government bond ETFs, such as the Amundi Euro Government Bond (LU1437018598) and the Xtrackers II Eurozone Government Bond (LU0643975591). 

Mixed inflows into bond ETFs

According to Crossflow, a net amount of 51 billion euros has flowed into bond ETFs on the European ETF market since the beginning of the year. Here, however, purchases are more spread out than with equity ETFs: the favorites were products that track European (EUR 10 billion) and US government bonds (EUR 8 billion) as well as European money market ETFs (EUR 8.8 billion). 

Crypto enthusiasm unbroken

Bitcoin, Ethereum, Solana, Ripple and even smaller currencies such as Polkadot and Polygon - at Lang & Schwarz, there is a lot going on in all crypto ETNs, as Kretschmann reports. “It's mainly buying,” he adds. Heinrich from Baader Bank reports good turnover for the Ripple ETN Coinshares Physical XRP (GB00BLD4ZN31), the CoinShares Physical Staked Algorand (GB00BNRRF105) and the 21Shares Solana Staking (CH1114873776). Like Bitcoin trackers, all three reached record highs last week. Since then, they have fallen slightly. However, Ripple and Algorand performed much better than Bitcoin after Trump's election victory - with prices quadrupling.

By Anna-Maria Borse, 10. December 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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