28/01/25 13:08:55

ETFs: “Hardly any profit-taking before the sell-off”

In the wake of yesterday's sell-off in many tech stocks, there was strong buying in equity ETFs on the Frankfurt Stock Exchange. Particularly in demand: US index funds. There was heavy trading on both sides in the crypto ETF segment.


28 January 2025. FRANKFURT (Börse Frankfurt). In the past week, when the “AI shock” from China was not yet foreseeable, investors continued to buy ETFs traded on the Frankfurt Stock Exchange. “Purchases accounted for two thirds of turnover,” summarizes Frank Mohr from Société Générale. Holger Heinrich from Baader Bank reports “50 percent more buying than selling”, which could be due to the positive stock market trend until Friday. Buying interest is particularly strong in “world products” such as the Xtrackers MSCI World EUR Hedged (IE000ONQ3X90), the iShares Core MSCI World EUR Hedged (IE00BKBF6H24) and the L&G Gerd Kommer Multifactor Equity (IE000FPWSL69).

“Out of the ESG products”

In addition to the almost traditional strong interest in global index trackers, Mohr has noticed above-average demand for US equity ETFs. “US index funds are far ahead with a 40 percent share and there is hardly any profit-taking this time.” The iShares S&P 500 (IE00B5BMR087) and Amundi Nasdaq (LU1681038599) in particular are being bought heavily. Heinrich is also observing a very special trend in US index funds: “Interestingly, the swap out of ESG products and into non-ESG products is continuing”. While the iShares MSCI USA EUR Hedged (IE00BZ173V67) and the iShares MSCI USA ESG Enhanced (IE00BHZPJ890) tend to be sold, investors are buying the Invesco S&P 500 EUR Hedged (IE00BRKWGL70) and the UBS S&P 500 (IE00B7K93397).

European equity ETFs are “currently not so popular despite the recent strong performance”, as Heinrich reports. Mohr also explains that there is “significantly less activity in Europe and Germany”. There are isolated instances of exposure to the Xtrackers EURO STOXX 50 (LU0274211217), but there are also some sales in index funds. 

Technology and defense remain in demand

Tech trackers continue to dominate the sector ETFs. The iShares S&P 500 IT Sector (IE00B3WJKG14) and First Trust Nasdaq Cybersecurity (IE00BF16M727) are particularly sought after. It will be interesting to see to what extent the sell-off in US and European tech stocks triggered by the AI success of Chinese start-up Deepseek will influence demand behavior in this segment. Ivo Orlemann, trader at ICF Bank, sees “continued regular buying interest among potential war profiteers” outside the tech sector. VanEck Defense (IE000YYE6WK5) and VanEck Uranium and Nuclear Technologies (IE000M7V94E1) are in demand.

Money market ETFs as a “modern clearing account”

In the bond segment, there is still a lot of activity on the overnight ETF side. “There is a lot of trading here to park cash positions and then reinvest the money,” reports Mohr of constant buying and selling for the products from Amundi (FR0010510800) and Xtrackers (LU0290358497). “Customers want a little more here than with overnight money”. The iShares USD Treasury Bond 1-3yr (IE00BDFK1573), which invests in short-dated US bonds, is also very popular.

Strong purchases of Bitcoin ETNs

There is a lot going on in the crypto ETN sector. According to Orlemann, “perennial favorites” such as VanEck Bitcoin (DE000A28M8D0) and WisdomTree Physical Bitcoin (GB00BJYDH287) are “traded in both directions”. The Solana ETNs from WisdomTree (GB00BNGJ9G01) and 21Shares Solana (CH1114873776), on the other hand, have “mostly seen returns”. The Ripple ETN from 21Shares (CH0454664043) is also “rather sold”. Heinrich also sees “brisk trading in the crypto segment in the wake of the ongoing euphoria”. A lot is therefore happening in the “common coin ETFs”. For Bitcoin, the trader names the products from WisdomTree (GB00BJYDH287); Bitwise (DE000A27Z304) and CoinShares (GB00BLD4ZL17).

By Thomas Koch, 28 January 2025, © Deutsche Börse AG

Thomas Koch is a CEFA investment analyst, investment specialist for structured products and a certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.

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