ETFs on the rise: Investors rely on European funds and gold!
Investors are shifting capital into European ETFs. Strong trading in gold ETFs and changes in the market in Frankfurt.
ETFs on the rise: Investors rely on European funds and gold!
The Frankfurt Stock Exchange is currently recording increasing sales and shifts in trading with Exchange Traded Funds (ETFs). Investors are withdrawing capital from the US and increasingly investing in European ETFs, indicating a clear trend towards Europe, reports finance.net. The gold sector in particular is attracting increasing interest from investors.
Frank Mohr from Société Générale points out that while there are good sales, activity is down compared to the beginning of April. Holger Heinrich from Baader Bank AG reports a ratio of around 30% more purchases than sales. Among the popular European index funds, the MSCI Europe, MSCI Europe Value and MSCI Europe Quality Factor stand out, while the STOXX Europe recorded 600 sales.
European ETFs and overbuying
The buying overload in Amundi and iShares ETFs in the STOXX Europe 600 area shows the strong interest, while selling pressure can be seen in Vanguard FTSE 100. The iShares S&P 500 IT Sector in the technology sector also shows high sales. However, the focus is particularly on gold mining ETFs, which are receiving strong demand.
Gold ETFs and their features
Gold ETFs offer investors an easy way to invest in gold and fall into two main categories. Important features to consider when selecting gold ETFs include large size with at least $200 million in assets under management and a reasonable expense ratio of less than 1%. It is recommended to stay away from leveraged ETFs that use borrowed money or derivatives, as shown on fool.com executed.
The top 5 gold ETFs listed by asset management (AUM) and expense ratio outline current interest:
| ETF | AUM (in billion USD) | cost ratio | Description |
|---|---|---|---|
| SPDR Gold Shares (GLD) | 69.0 | 0.40% | Largest and most liquid gold ETF, holds gold bars. |
| iShares Gold Trust (IAU) | 29.4 | 0.25% | Similar to GLD but with a lower cost ratio. |
| VanEck Vectors Gold Miners ETF (GDX) | 13.6 | 0.51% | Focused on stocks of large gold mining companies. |
| VanEck Vectors Junior Gold Miners ETF (GDXJ) | 4.9 | 0.52% | Targets smaller mining companies with higher growth potential. |
| SPDR Gold MiniShares Trust (GLDM) | 8.6 | 0.10% | Low-cost option for private investors, offering direct access to gold. |
These gold ETFs allow investors to speculate on gold prices without owning physical gold. Gold mining companies could even offer higher returns based on their production cash flows.
Overall, developments on the Frankfurt Stock Exchange show that investors are currently focusing on European markets and especially on gold ETFs, while the US market focus is slowly dwindling.