indexes in this article
FRANKFURT (DEUTSCHE-BOERSE AG) – Concerns about inflation, interest rates and recession have long been part of everyday life. Recently, however, sentiment around China has shifted again as the number of kroner increases. The bottom line is that the proceeds to equity ETFs still prevail.
July 12, 2022 Frankfurt (Frankfurt Stock Exchange). Despite many concerns, ETFs are still in demand. Hubert Heuclin of BNP Paribas reports inflows to ETFs of stocks and bonds, but not large ones. “Unexpectedly strong data on the US labor market provided a temporary relief, but there are generally increasing signs of recession,” notes a trader. With US growth slowing significantly, the market is likely to remain tough, including selloff waves.
According to Heuclin, there are currently no clear favorites for stock ETFs: the trading moves are spread across the US, Eurozone and global actions. For example, iShares Core S&P 500 (IE00B5BMR087) and iShares S&P 500 Swap (IE00BMTX1Y45) are well received. As for the euro area, iShares Euro Stoxx (DE000A0D8Q07) is used. Investors only say goodbye to the Stoxx Europe 600 ETFs, which map Europe as a whole – be it the Lyxor Core Stoxx Europe 600 (LU0908500753) or the iShares counterpart (DE0002635307).
Stocks in China: buy first, then sell
According to Torben Bendt of Lang & Schwarz, China is a big topic right now. Record high turnover with Xtrackers MSCI China (LU0514695690). “There was a lot of purchases last week, including – as the market fell – more sales.” BNP Paribas customers rely primarily on iShares MSCI China UCITS (IE00BJ5JPG56, IE00BQT3WG13). The Chinese stock market has been on a recovery path for several weeks. This week, however, it is falling again due to rising kronor numbers.
Chinese equities peak in June
As reported by Morningstar, nearly all of the top 15 ETFs in June were traded in the Chinese market. The ranking is maintained by Global X China Electric Vehicle and Battery (IE00094FRAA6). Demonstrations of Chinese companies from the electric vehicle and battery industry.
Chinese tech stocks and their corresponding index funds also performed very well in June. Morningstar reports a “vertical shift in sentiment” after industry giants such as Alibaba and Baidu reported better-than-expected quarterly results. Investors would be attracted by low valuations and the search for results during the bear market in the US and Europe. “The worst could come to an end for Chinese tech companies,” said Chelsey Tam, an equity analyst at Morningstar. The results of the great internet giants may surprise positively, as they are now less focused on growth and more on profitability.
Energy ETFs: Up 44 percent this year
Trade in sector ETFs continues to revolve around gas and oil products. Russian gas has not traveled through the Nord Stream 1 pipeline to Europe since Monday due to maintenance work. There is a fear that gas supplies will not be resumed.
Energy index funds are seeing strong inflows again, notes Heuclin, for example in the case of the iShares S&P 500 Energy Sector (IE00B42NKQ00). Although it has been weakening since mid-June, it has been increasing by 44% since the beginning of the year.
No interest in protecting against inflation
According to Heuclin, government bonds are most in demand in the bond sector and fewer in corporate bonds. Portfolios include, among others European government bonds with top-rated macro-weighted government bond Lyxor EuroMTS 3-5Y (LU1829219713), US government bond iShares USD 3-7yr EUR Hedged (IE00BGPP6473) and German government bond with iShares eb .rexx Government Germany 2.5 -5.5 years (DE0006289481). In the area of corporate bonds, the SPDR Bloomberg 0-3 Year Euro Corporate Bond (IE00BC7GZW19) is very popular among investors.
Inflation-protected bonds no longer play a major role: Heuclin reports sales here, for example iShares USD TIPS (IE00B1FZSC47).
ETC: focus on gas and gold
Stock traded ETCs such as WisdomTree Natural Gas 3x Daily Leveraged (IE00BLRPRG98), which mirrors the development of gas prices with 3 leverage, are also very active at Lang & Schwarz. He also sees high turnover for gold ETC, especially for Xetra-Gold (DE000A0S9GB0). The price of gold has recently fallen, with the troy ounce now trading at $ 1,735. The highest-ever March was $ 2,069.
author: Anna-Maria Borse, 07/12/2022, © Deutsche Börse AG
(Deutsche Börse AG is solely responsible for the content of the column. The articles do not constitute an invitation to buy or sell any securities or other assets.)