February was mitigated for the ETF market....
Philip Philippides, Head of Amundi ETF & Indexing Sales for UK and Ireland
In Europe, investment flows were positive (at +7.05 billion euros), whereas globally investors pulled back slightly from the market (-1.18 billion euros)
Despite a correction early in the month, the European equity ETF market held up well in February, gaining 5.2 billion euros. During the same period, however, this asset class suffered 12.4 billion euros of withdrawals stateside. Globally, the equity ETF market ended the month with an overall outflow of 4.5 billion euros, despite 2.7 billion euros of inflows to Asia. In Fixed income, strong ETF flows globally (+3.4 billion euros) were shared amongst the three key investment regions.
Globally, in the equities universe, North American stocks suffered from the highest volume of withdrawals, at -15.9 billion euros. We note, however, that while US investors substantially divested from their domestic market (-17.9 billion euros), their European peers continued to increase their exposure to US equities (+2 billion), as well as the Eurozone (+1.9 billion). The equity strategies of European and US investors meanwhile converged around exposure to emerging markets, with 1.3 and 2.7 billion euros of subscriptions respectively. In Europe, global equity ETFs experienced the biggest outflows (-2.6 billion euros).
A revival of risk aversion has been unfavourable for corporate bond ETFs on both sides of the Atlantic. This segment saw 1.2 billion euros leave the European market and 4.7 billion euros the American. Flows instead shifted to government bond ETFs in comparable volumes: +1.7 billion euros in Europe and +3.3 billion in North America. Stateside, ‘aggregate’ bonds also attracted investors to the tune of +3.5 billion euros. Finally, the stirrings of interest rate increases prompted investors in Europe to strengthen their positions in floating rate notes (+733 million euros).