FRANKFURT (DEUTSCHE-BOERSE AG) - The DAX, the major US indices, crypto assets as well as tech and defense stocks were the most popular underlyings for leveraged products and investment certificates in 2024. US President-elect Donald Trump is likely to play an important role in the new year.
January 2, 2025 FRANKFURT (Borse Frankfurt). Trading in leveraged products and investment certificates on the Borse Frankfurt was dominated by the major trends on the capital markets last year. "2024 was the year of tech and AI stocks right into the summer," explains Patrick Kesselhut from Société Générale. In particular, factor warrants on the so-called Magnificent Seven (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla) were traded "up and down" at the issuer. Many investors also opted for index trackers such as the Unlimited Certificate on the Nasdaq 100 (DE000SD1RB57), in which the aforementioned stocks have a relatively high weighting.
Great interest in crypto products
Towards the end of the year, investors increasingly focused on leveraged products on crypto stocks such as Microstrategy and Coinbase. The entire crypto sector was increasingly in demand. The rally in cryptocurrencies triggered by the surprisingly clear outcome of the US presidential election played a key role in this. In 2024, six of the ten highest-turnover products on the Frankfurt Stock Exchange were based on cryptocurrencies. The tracker certificate on the "DER AKTION? "R Krypto TSI" index (CH1171791515) issued by Leonteq in mid-2022 was traded particularly frequently. The underlying, which is recompiled every three months, always contains the ten "trending" cryptocurrencies. Following Donald Trump's election victory, the tracker rose by over 160% within four weeks before correcting by 20%.
Vontobel's open-ended participation certificate on BTC/USD (DE000VQ63TC1), which has existed since spring 2021, and the mini future on the Bitcoin future (DE000VM87TM8), which was only launched by the Swiss company at the end of January, were also bought very often. Thanks to the leverage effect, the latter rose more than sevenfold at its peak. Things did not go so well for a Bitcoin Turbo, which was also in high demand in the first half of the year, rising in price by a good 200% at times in the first quarter, but was then knocked out in the course of the early summer correction of the cryptocurrency at Bitcoin prices of around USD 55,000. The put was therefore no longer able to benefit from the bull market at the end of the year.
DAX put with very high turnover
However, the product with by far the highest turnover of the entire year was not a crypto security, but a Vontobel put turbo warrant on the DAX, which also matured early at the beginning of December near the index's new record high. Many investors probably wanted to either hedge their well-performing equity holdings or deliberately bet on a correction in the DAX. Turbo warrants are very well suited to such strategies due to the fact that implied volatility usually rises significantly when prices on the stock markets fall sharply. "The DAX continues to play the main role in classic warrants," confirms Kesselhut.
In the area of individual shares, however, knock-out products remained the preferred investment vehicle. A UBS open-end call turbo warrant on the Rheinmetall defense group (DE000UM1S8L6) was particularly sought after in 2024. The warrant, which was launched on the market in mid-February, increased almost eightfold at its high.
Clear outperformance with semiconductor discounters
In the investment certificate segment, discounters on the relatively volatile European chip stocks were in demand in 2024. One of the top performers was a Société Générale discount certificate on ASML Holding (), which matured shortly before Christmas. As the share did not reach the cap of EUR 790 at the end, investors were able to add ASML shares to their portfolio. All in all, the certificate nevertheless achieved a price gain of around 15 percent since it was issued 13 months earlier, outperforming the share price, which was up 9 percent. The DZ Bank discounter on Infineon (), which has also just expired, performed even better: three years after it was issued, it was redeemed at a high of 30 euros, up 36 percent, while the share price rose by 12 percent.
"Quanto products could become exciting again"
Kesselhut expects interest in products based on US technology shares to remain strong for the time being "due to the clear profit trend" in the current borrower year. "Crypto shares will also remain exciting," predicts the certificate specialist, who also expects increased volatility in the euro-US dollar exchange rate. According to Kesselhut, the stronger fluctuations here could be triggered by comments from Donald Trump. "Especially when these are directed at the US Federal Reserve". Whether the US currency can continue to soar in this environment and thus provide an additional tailwind for euro-denominated products on US assets such as 2024? "Against this backdrop, quanto products could become exciting again," says the Société Générale expert, pointing to securities with built-in currency protection as an alternative.
By Thomas Koch, January 2, 2025, © Deutsche Borse AG
(Deutsche Borse AG is solely responsible for the content of this column. The articles are not an invitation to buy or sell securities or other assets).