As the largest brokerage house in Croatia and Slovenia, InterCapital deals with a broad range of clients (both institutional and retail) who utilise various trading strategies in orders to achieve an above average return. In order to achieve their goals some investors tend to incorporate shares and ETFs outside of the region into their portfolio. Globalization, technological development of trading platforms, freedom of capital movement and a number of other reasons have led to the investment perspectives of investors spreading to the whole World.
In order to present current investment trends of our clients in foreign markets we bring you an overview of our clients trading activity in August, with a focus on shares and ETFs traded abroad.
For starters, let us begin with our nearest market. By analysing the trading of our clients on the Ljubljana Stock Exchange, we can conclude that clients still prefer the so-called Blue chips in Slovenia whose business they are better acquainted with and can more easily guess the potential effects of a pandemic on their business. The most traded shares were Krka, Petrol, NLB and Zavarovalnica Triglav. This is not surprising given that these companies are the largest and most liquid issues at LJSE.
However, since we consider Ljubljana Stock Exchange as part of our domestic market, for the remaining part of this blog we will focus on stock exchanges in western Europe and the USA.
Most traded shares
Most traded ETFs
| wdt_ID | Most traded shares |
|---|---|
| 1 | Alpha Pro Tech |
| 2 | Gevo |
| 3 | Sorrento Therapeutics |
| 4 | United Airlines Holdings |
| 5 | Tesla |
| 6 | Eastman Kodak |
| 7 | Kornit Digital |
| 8 | Ayro |
| 9 | Inovio Pharmaceuticals |
| 10 | Amazon |
| wdt_ID | Most traded ETF | Underlying assets |
|---|---|---|
| 1 | Proshares UltraPro Short QQQ | Three times the inverse (-3x) of the daily performance of the Nasdaq-100 Index |
| 2 | L&G DAX Daily 2x Long | Twice the daily performance of the DAX Index |
| 3 | X ShortDAX x2 Daily Swap | Two times the inverse (-2x) of the daily performance of the DAX Index |
| 4 | Direxion dly S&P 500 bear 3x | Three times the inverse (-3x) of the daily performance of the S&P 500 Index |
| 5 | iShares Silver Trust | Silver |
| 6 | Vanguard S&P 500 | S&P 500 |
| 7 | iShares MSCI United Kingdom | MSCI United Kingdom Index. |
| 8 | Direxion dly S&P 500 bull 3x | Three times the daily performance of the S&P 500 Index |
| 9 | iShares MSCI Turkey | Broad-based index composed of Turkish equities. |
| 10 | SPDR Gold Shares | Gold bullion (USD) |
When looking at the shares mostly traded by our clients, it becomes obvious that the most interesting shares now are shares with a lot of volatility. At the top of the list comes Alpha Pro Tech, a global manufacturer of personal protective equipment including medical face masks, face shields, and infection control suits, to whom our clients have been showing a lot of interest for the past several months.
ETFs produce a mixed picture. As one can notice both long and short strategy ETFs are interchanging in the top 4 position on our top 10 traded list. Considering that we saw major foreign indices reach new peaks in August it might not be that surprising that investors have split thoughts on future, with some expecting a downward trend to emerge, while other expect the rise to continue.
To compare our clients’ investments with the global movement of capital, we present a list of the top 10 ETFs in August by amount of inflows and outflows.
The data on inflows, or outflows of cash from ETFs, is important because it indicates the interest of ETF managers in purchases, or sales of so-called Underlying (most commonly stocks, sometimes bonds or other instruments). ETFs with inflows buy additional underlying, while ETFs that have outflows of cash sell their underlying on the stock exchange.
Top 10 ETFs According to Inflow of Funds
| wdt_ID | ETF | Underlying asset | Inflow USDm |
|---|---|---|---|
| 1 | Invesco QQQ Trust | Nasdaq 100 | 2.269,27 |
| 2 | Vanguard Total Bond Market | Broad, market-value-weighted index of US dollar-denominated, investment-grade, taxable, fixed-income securities with maturities of at least one year. | 2.217,79 |
| 3 | iShares Core MSCI EAFE | Market-cap-weighted index of developed-market stocks in Europe, Australasia and the Far East, and excludes the US and Canada. | 2.181,88 |
| 4 | Vanguard Total Stock Market | Cap-weighted index that measures the investable US equities market, encompassing the entire market-cap spectrum. | 2.028,34 |
| 5 | Vanguard Short-Term Corporate Bond | Market-weighted index of investment-grade, fixed-rate corporate bonds with maturities between 1 and 5 years. | 1.776,67 |
| 6 | iShares TIPS Bond | Market-value-weighted index of US Treasury inflation-protected securities with at least one year remaining in maturity. | 1.333,90 |
| 7 | Vanguard Intermediate-Term Corporate Bond | Market-weighted index of investment-grade corporate bonds with maturities of 5-10 years. | 1.136,77 |
| 8 | Vanguard Total International Stock | Market-cap-weighted index of global stocks covering 99% of the world's global market capitalization outside the US | 974,74 |
| 9 | Xtrackers USD High Yield Corporate Bond | Index of USD-denominated high-yield corporate bonds with 1 to 15 years remaining to maturity | 974,02 |
| 10 | ARK Innovation | Targets companies poised to benefit from disruptive innovation in one of three areas: industrial innovation, genomics or Web x.0. | 944,13 |
If we compare the tables showing the ETFs with the largest inflows and outflows of funds with the previous table showing the ETFs that our clients traded the most, we can see that foreign investors are somewhat more conservative. This can be partly explained by the fact that our investors mainly invest in shares and indices, and less in bonds. As you can see in the table above, 4 out of 10 most popular ETFs among global investors have invested bonds as their underlying asset class. On the other hand, the larger outflows were seen in ETFs tracking the S&P 500.
Top 10 ETFs According to Outflow of Funds
| wdt_ID | ETF | Underlying asset | Outflow USDm |
|---|---|---|---|
| 1 | SPDR S&P 500 | S&P 500 index | -2.471,38 |
| 2 | Vanguard Growth | CRSP US Large Cap Growth Index | -1.716,83 |
| 3 | iShares Short Treasury Bond | Index composed of U.S. Treasury bonds with remaining maturities one year or less. | -1.716,10 |
| 4 | iShares 20+ Year Treasury Bond | Index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. | -1.519,44 |
| 5 | SPDR S&P Dividend | S&P High Yield Dividend Aristocrats Index | -1.505,35 |
| 6 | iShares Russell 1000 Growth | Russell 1000 Growth Index | -1.312,72 |
| 7 | ProShares UltraPro QQQ | Three times the inverse (-3x) of the daily performance of the Nasdaq-100 Index | -1.040,20 |
| 8 | ProShares S&P 500 Dividend Aristocrats | S&P 500 Dividend Aristocrats Index | -1.025,06 |
| 9 | SPDR Bloomberg Barclays 1-3 Month T-Bill | Bloomberg Barclays US Treasury Bills 1-3 Month Index | -755,15 |
| 10 | iShares MSCI USA Min Vol Factor | Index composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market | -701,47 |
Finally, it is important to note that price movements described in this text are a result of trading in August and are subject to future changes.
