01/04/25 12:13:36

ETFs: “Europe euphoria over”

Although European shares are not being sold on a large scale, the buying mood is also gone. This has long been the case for US equities anyway. Defense ETFs and gold ETCs remain popular.
 

1 April 2025. FRANKFURT (Börse Frankfurt). With share prices also falling in Europe, the enthusiasm for European equities seen in recent weeks has cooled somewhat. However, there can be no talk of a sell-off. Leo Puschmann from Lang & Schwarz reports both buying and selling. “It's rather quiet. We are waiting to see what happens next,” reports Frank Wöllnitz from ICF Bank.

Yesterday, the DAX briefly fell below the 22,000 point mark for the first time since February. The already announced US tariffs on cars and the further tariffs expected tomorrow weighed on the market. By midday on Tuesday, however, the index was back at 22,510 points. The all-time high of 23,476 from two weeks ago is still a long way off. 

Interest in a different weighting

According to Puschmann, European equities are traded in both directions, “the focus is on France”, adds the trader. USA and Nasdaq trackers are still clearly on the sell lists. World ETFs such as the iShares Core MSCI World (IE00B4L5Y983) also tend to be sold.

However, Wöllnitz sees great interest in the L&G Gerd Kommer Multifactor Equity (IE0001UQQ933). This invests in large, mid and small caps from industrialized and emerging countries, but is weighted differently to the MSCI World, with half of the weighting based on market capitalization and half on country GDP. This avoids the strong concentration on the USA. Factors such as size and value are also taken into account. Since the beginning of the year, the iShares Core MSCI World is down 2.5 percent, but the iShares Core MSCI World is down 7 percent. 

Europe still ahead. While US equities have lost ground since the beginning of the year, European equities are still clearly on the winning side. According to the ETF platform justETF, the best country ETFs so far this year are index trackers that track Polish (up 25 percent), Greek (up 18 percent), Spanish (up 14 percent), Austrian (up 13 percent) and Italian equities (up 12 percent). Thailand, Indonesia, Taiwan, Turkey and Malaysia bring up the rear with losses of between 11 and 17 percent.

Defense rather than tech sector

In trading with sector ETFs, sales of tech stocks are continuing. According to Puschmann, the iShares S&P 500 Information Technology (IE00B3WJKG14), for example, is being sold. Defense ETFs, on the other hand, remain popular. “They are only in demand,” reports Wöllnitz. The WisdomTree Europe Defense (IE0002Y8CX98), which tracks European defense companies, is particularly popular. VanEck Defense (IE000YYE6WK5) is also popular. At Lang & Schwarz, defense stocks are also gaining ground, especially European ones. 

Money market trackers sold, gold ETCs bought

No longer so popular: money market ETFs, which have been so popular for a long time. “We are seeing a lot of selling, some people are probably looking for liquidity to enter the stock market,” notes Puschmann.

New highs in the price of gold are also leading to strong demand for gold ETCs, as Puschmann notes. “We are almost exclusively seeing purchases in gold and silver ETCs,” he reports. The favorite is the iShares Physical Gold (IE00B4ND3602), also popular is the WisdomTree Silver 3x Daily Leveraged (IE00B7XD2195). However, gold mining ETFs such as VanEck Gold Miners (IE00BQQP9F84) are also in high demand.

The price of gold recently climbed to just under 3,138 US dollars, a rise of 20 percent since the beginning of the year. Trading in crypto ETNs has become much quieter. Bitcoin currently costs around USD 84,000, a drop of 10 percent since the start of the year. 

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

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