Lyxor ETF Barometer – Monthly European ETF Market Trends for February 2017

European ETF Market flows continued their positive trend in February 2017……

Marlène Hassine – Head of ETF Research – Lyxor ETF

Net New Assets (NNA) during this month amounted to EUR9.4bn, nearly twice the one-year average of EUR4.9bn. Total Assets under Management are up 7% vs. the end of 2016, reaching EUR551bn, including a market impact of 3.9%. Both developed and emerging markets equity and fixed income ETFs saw positive flows in a risk-on environment supported by an upbeat picture of macroeconomic data across markets.

Equity ETFs recorded strong inflows at EUR6.1bn. Interestingly, flows concerned both developed and emerging markets ETFs amidst a supportive economic environment. Both US and European ETFs benefited from this improved situation with respectively EUR0.9bn and EUR1.3bn of NNA. Significant inflows into global equity ETFs also continued reflecting this increased optimism at EUR0.7bn. Asia Pacific equity ETFs rebounded at EUR0.9bn to reach a one-year record high. On the emerging markets side, flows underwent a trend reversal with positive flows of EUR0.8bn. Interestingly, emerging markets ETFs on broad indices saw two thirds of these flows while flows on emerging country ETFs continued to be sustained mainly on India. Smart Beta ETFs saw significant inflows at EUR1.1Bn. Value ETFs continued to benefit from the rotation towards more cyclical strategies with EUR918M of inflows, a one year record high. Fundamental strategies on Japanese ETFs also attracted some flows at EUR212M.

Fixed income ETF inflows reached a 7-month record high at EUR3.2bn. Interestingly, these fixed income flows were mainly focused on Emerging debt and high yield ETFs. European govies continued to see limited flows. Flows on emerging debt were once again positive at EUR1.2bn as the search for yield continued. This also fueled positive flows into high yield ETFs with inflows at EUR427M. In an improving economic environment, flows into inflation-linked ETFs reached a one year record high at EUR948M. Furthermore, flows poured into short bond strategy ETFs at EUR365M in an environment of increasing political risk in Europe.

Commodities ETF saw some flows at EUR209 on both broad exposures and precious metals.

* including also non UCITS eligible/compliant ETFs.


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