Lyxor ETF Barometer – Monthly European ETF Market Trends

The European ETF Market started the year slowly with limited flows in January 2016….

Marlène Hassine – Head of ETF Research – Lyxor ETF

Lyxor Etf Barometer

Net New Assets (NNA) during this month amounted to EUR1.9BN, 64% below the one year average of EUR5.2BN. Total Assets under Management are down 4% vs. the end of 2015, reaching EUR432.8BN, and including a negative market impact (-4.5%). In volatile markets hammered by concerns over China, oil price evolution and Emerging Markets worries, positive flows were mainly concentrated toward European ETFs while Emerging Markets ETFs saw significant outflows.

Equity indices gathered two thirds of the flows at EUR1.3BN. European equity ETF flows saw significant flows of EUR2.7BN sustained by Mr. Draghi’s reiterated dovish stance. US flows were positive throughout the month although limited to EUR209M, with an interesting burst on minimum volatility products in a highly volatile month. Japanese flows after a positive start in the first half of the month turned negative to EUR816M, a one year record high as fear about Chinese growth continued to negatively impact Asian equities as a whole. Emerging markets equity flows did not confirm their Q4 2015 rebound and were negative by EUR1BN.

This represents more than what was lost during the whole of 2015 where Emerging markets outflows reached EUR965M. In a context of Chinese equity market turmoil (-23.5% in one month for the CSI 300 NTR in EUR), outflows concern both broad Emerging Market indices at EUR561M and Asian indices at EUR511M.

Fixed income indices’ inflows reached EUR587M, i.e. 68% below the one year average. These limited fixed income flows have mainly concerned developed market govies at EUR1.3BN. Both European and US govies saw inflows respectively of EUR732M and EUR263M in a declining interest rate environment. Suffering from the overall pressure on risky assets and fear of economic slowdown, both investment grade corporate bond ETFs and high yield bond ETFs have registered outflows totaling EUR643M. High yield bond ETF outflows of EUR293M represent a one year record high as these ETFs are more specifically sensitive to the volatility of the US high yield bond market.

Commodities flows have been nearly flat at EUR28M with limited positive flows on Gold ETFs of EUR44M and EUR16M of outflows on broad indices.


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