Monthly net flow into EMEA-listed ETPs picks up to $6.8B ....

Patrick Mattar, from the capital markets team at iShares


  • EMEA-listed ETPs gathered $6.8B in September, up from $4.9B in August, as investors returned to the markets after the summer holidays.
  • Equities dominated with 96% of the inflows, the largest proportion of the total monthly figure since December 2016. A comparatively paltry $0.7B flowed into fixed income ETPs, the lowest monthly amount this year. EMD was the sole pocket of strength.
  • Outflows continued from EMEA-listed commodity funds for the second month in a row. This negative run follows seven straight months of inflows.

Key themes this month:

Ich bin nicht ein Berliner

  • September was another positive month for EMEA-listed European equity ETPs. They have now had 13 consecutive months of inflows – the longest run on record.
  • US investor appetite for European equities appears to be cooling, however. $0.5B has been withdrawn from US-listed European equity ETPs over the last two months.
  • With the European growth outlook strengthening, it seems that currency is playing an increasing role in flows. US dollar gains in September might have encouraged US investors to return to domestic, USD-earning equities.

EM-pire building

  • September was the eighth straight month of inflows into EMEAlisted emerging markets ETPs – the longest run since 2010 and the second-longest on record.
  • $6.6B has been added to EMEA-listed EM equity ETPs since February, while US-listed ETPs gathered $29.2B. In both cases the majority went into broad emerging markets exposures.
  • Some of the EM ETP flows could be explained by investors expanding the range of vehicles they use to access EM. EM futures contracts are running rich, so investors could be considering the ETF as a cost-effective equivalent.

US financials fly

  • September was the biggest-ever month of inflows (+$0.5B) into EMEA-listed US financial sector ETPs, amid speculation that an imminent US rate hike will improve bank profitability.
  • The financials inflows were so high, that even though all other sectors in aggregate had outflows, the net figure was still the second-largest ever month of inflows to EMEA-listed US sector ETPs.
  • These are big numbers for EMEA-listed US sector ETPs, which have a total AUM of $6.4B. But they pale in comparison to USlisted US sector ETPs, which have a combined AUM of $323B and where $1.1B was added last month alone. US investors seem to be more familiar with using ETFs to express views on specific US sectors than European investors.

Gold in the red

  • September was an important month for EMEA-listed gold ETPs. It was the first month of outflows since December 2016, breaking an 8month inflow trend.
  • We have previously highlighted the divergence between gold flows into EMEA- and US-listed ETPs. This month it was more pronounced than at any point this year, as US-listed gold funds enjoyed their best inflow month since June 2016. US investors have now added $3.8B over the last two months.
  • It appears that US investors have focused on protecting portfolios over the last two months. Europeans on the other hand have increased allocations to risk assets and reduced exposure to gold

Ex machina

  • ETFs providing exposure to global companies that could benefit from the increasing use of robotics experienced their biggest month of inflows over September, adding $780m.
  • At the start of 2017, the four global ETPs in existence had a total AUM of $415m. Today their combined AUM stands at $3.6B – an 18x increase.
  • If we include mutual funds, the combined universe of 16 funds currently has an AUM of $14.7B, up from less than $300m in 2015. The combined AUM now sits at $0.5B, more than the GDP of Jamaica.

Source: ETFWorld


To receive our free newsletter, subscribe HERE


UK Institutional Investors and Financial Advisers and Wealth Managers
Important legal information

Before accessing this website you must read and accept the following terms and legal notices. If you are not able to access the website according to these terms or do not understand their meaning you must not proceed any further and should decline to accept them.

This website includes information about financial products that are not registered for sale in United Kingdom. This information is therefore made available solely to persons meeting the below criteria. These persons must not pass on any information to third parties with whom it would not be lawful to do so according to local legislation and regulation.

Persons accessing this website must be either an Investment Professional or a High Net Worth Company or Financial Advisers or Wealth Managers as outlined below:

An 'Investment Professional' is defined to include:

(i) an authorised person (this will include banks, stockbrokers, securities houses, investment managers, insurance companies and financial intermediaries);

(ii) a person who is exempt from the requirement for authorisation under the Financial Services and Markets Act 2000 (“FSMA”) (this will include appointed representatives of authorised persons, The Bank of England, central banks of other EEA States, The European Central Bank and the International Monetary Fund);

(iii) a person whose ordinary activities involve him in carrying on a regulated activity as defined in the FSMA (e.g., arranging deals in or advising on investments) to which the financial promotion relates or who it is reasonable to expect will carry on such activity for the purposes of a business carried on by him;

(iv) a government, local authority or international organisation; and

(v) a person acting in his capacity as a director, officer or employee of a person of a type described in paragraphs

(i) to (iv) above (i.e. he must not be acting on his own personal account) whose responsibilities, when acting in his capacity as a director, officer or employee of such person, involve him in engaging in regulated activities as defined in the FSMA.

High Net Worth Companies, include:

(i) a body corporate which has a called-up share capital or net assets of at least £500,000 (if it has more than 20 members or is a subsidiary of a parent undertaking with more than 20 members) or, in any other case, at least £5 million;

(ii) an unincorporated association or partnership which has net assets of at least £5 million;

(iii) the trustee of a trust with assets (before deducting any liabilities) of at least £10 million or which were at least £10 million within the previous year; or

(iv) a person acting in his capacity as a director, officer or employee of a person of a type described in paragraphs (i) to (iii) above (i.e. he must not be acting on his own personal account) whose responsibilities, when acting in his capacity as a director, officer or employee of such person, involve him in engaging in regulated activities as defined in the FSMA.

Financial Advisers and Wealth Managers, include:

Persons that are authorised by the relevant authorities in the UK to act as a professional investor or financial adviser

Persons who do not meet these criteria cannot proceed any further and must leave the website.

This site uses cookies. Cookies help us know you better and improve your navigation experience. By continuing to browse the site you are agreeing to our use of cookies.