ETFs: Under the spell of the US election
Buying dominates. US equities in particular are doing well, including many small cap ETFs. Gold ETCs and crypto ETFs are also seeing a lot of turnover - with inflows and outflows.
5 November 2024. FRANKFURT (Börse Frankfurt). ETF trading is also dominated by today's US election. “We are seeing extreme buying of S&P 500 and Nasdaq but also MSCI World ETFs,” reports Leo Puschmann from Lang & Schwarz. He expects even higher trading volumes and major fluctuations in the days following the election. “Cryptocurrencies and precious metals are also a big topic,” he adds.
Holger Heinrich from Baader Bank also reports a clear buying overhang for equity ETFs - specifically 50 percent more buys than sells, with increasing turnover. The US stock markets fell slightly yesterday, Monday. The DAX is also weaker today and stands at 19,168 points at midday on Tuesday.
High demand for US equities
As far as US equities are concerned, according to Heinrich, different variants of the MSCI USA are in demand. He is also seeing increased activity in small cap ETFs with mostly purchases, such as the Amundi Russell 1000 Growth (IE0005E8B9S4), the UBS MSCI USA Small Cap ESG Leaders (IE000XFXBGR0) and the Amundi S&P SmallCap 600 ESG (IE000XLJ2JQ9).
US equities among top performers
ETFs that track US equities are already among the top performers among country ETFs this year. Since the beginning of the year, ETFs with a focus on the USA have gained 23%. Only Pakistan (up 37%), Taiwan (up 29%) and China (up 26%) have performed better. Mexico (down 22%), Brazil (down 17%), South Korea (down 9%) and Vietnam (down 7%) brought up the rear.
According to Heinrich, small cap trackers (IE0003R87OG3) were also bought on a global basis, as were quality dividend ETFs (IE00BF2B0M76). “Europe was less of a focus,” he notes. Quality dividend ETFs tended to be sold here. On the buy list, however, were ETFs that track British equities, such as the Xtrackers FTSE 100 (LU0838780707).
According to Puschmann, India's equities have become somewhat quieter. “After all the buying, we are now seeing a little more selling.” The MSCI India had risen sharply until the end of September, but has weakened since then.
According to Heinrich, the biotech sector stands out in trading with sector ETFs. “Here, too, most investors are buying,” he notes with regard to Global X Genomics & Biotechnology (IE00BM8R0N95). The Xtrackers World Biodiversity Focus SRI (IE000E0V65D8) was also well received. This focuses on equities from industrialized countries, and stocks are selected according to sustainability criteria with a particular focus on biodiversity.
Gold and cryptocurrencies driven by uncertainty
Precious metals also remain an issue - due to the ongoing uncertainty and falling interest rates, which make precious metals more attractive. The price of gold reached a new all-time high of USD 2,789.52 last Wednesday and is currently trading only slightly lower. Puschmann mainly sees purchases for gold mining ETFs such as VanEck Gold Miners (IE00BQQP9F84) and VanEck Junior Gold Miners (IE00BQQP9G91). Precious metal ETCs with leverage, specifically the WisdomTree Gold 3x Daily Leveraged (IE00B8HGT870) and its short variant (IE00B6X4BP29) as well as the corresponding products on silver, are being traded in both directions.
Cryptocurrencies are currently heavily dependent on Donald Trump's chances of becoming US president. Last week, Bitcoin had risen sharply to over USD 72,000, but in view of the slight drop in the polls, it is now back down to USD 68,853. Crypto fans are hoping for Trump and fear tighter regulation under Harris. For crypto ETNs, Puschmann reports purchases and sales in equal measure, especially the VanEck Bitcoin ETN (DE000A28M8D0).
By Anna Maria Borse 5 November 2024, © Deutsche Börse
About the Author
Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.
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