European ETF market flows continued their sustained upward trend in June. Net New Assets (NNA) over the month totalled EUR8.5bn…..
Marlène Hassine – Head of ETF Research – Lyxor ETF
Total ETF Assets under Management are up 12% vs. the end of 2016, reaching EUR578bn and including a positive market impact of 2%. For the first time since September 2016, Fixed Income ETFs generated more NNA than Equity ETFs.
Equity ETF inflows pulled back at EUR4bn. Export-driven countries and sectors were sold off in Europe as the euro surged. In this context, European equity ETF inflows decreased substantially at EUR860M. US equity ETFs generated EUR392M of NNA, despite mixed macroeconomic news flow. Global ETFs inflows also slowed, to EUR634M. Asia Pacific equity ETFs recorded much higher inflows of EUR866M due to perceived valuation opportunities. Emerging market equity ETFs sustained inflows of EUR1.4bn. Once again, these flows were almost exclusively focused on broad-based ETFs, rather than single countries. Smart beta ETF inflows amounted to EUR584M. Income-generating ETF flows were back in positive territory with EUR181M of inflows, but value ETFs experienced a slowdown at EUR294M.
Fixed income ETF inflows increased to EUR4.5bn, their highest level since July 2016. Corporate bonds maintained strong inflows at EUR1.8bn as European corporate bonds continued to rally. Emerging debt ETFs gathered higher inflows as the search for yield continued, with EUR1.4bn of NNA. High yield ETFs experienced outflows of –EUR82M, whereas European govie ETFs recorded positive inflows of EUR824M. Tapering hints from key central banks amid mixed inflation pressure and questions about the global growth pulse forced investors to revise their normalization expectations. Inflation-linked ETFs generated EUR196M of NNA.
Commodities flows turned negative at –EUR56M. Outflows were mainly focused on broad commodity ETFs.