European ETF Market flows show signs of revival in October 2015. NET NEW ASSETS (NNA) during this month amounted to…
Marlène Hassine – Head of ETF Research – Lyxor ETF
Lyxor Etf Barometer – October 2015
EUR5.8bn, in line with the one year average. Total Assets under anagement are up 24% vs. the end of 2014, reaching EUR448bn, which includes a significant rise in market valuations (+9%*).
Global Emerging equity and US fixed income ETF flows benefited from a more risk on environment. European fixed income ETF flows have seen a revival amidst hope of an increase in QE following comments from the ECB president Mario Draghi.
■ Equity indexations saw a slight increase in inflows at EUR2.2bn still below the oneyear average of EUR3bn. With the decreasing probability of a FED interest rate increase
before year end, investors have started to re-enter emerging markets mainly through global Emerging Market ETFs with EUR869M of inflows, which is a one-year record high. Emerging Asian equity ETF flows are still negative at EUR112M but up from EUR752M of outflows in August 2015. Conversely, inflows on Developed equities have been limited at EUR1bn as valuations looked less attractive against current economic and earnings momentum. Flows were close to zero on both US and Japanese equity ETFs. European Equity ETF inflows were at their lowest level since June 2015 at EUR669M.
■ Fixed income indexation inflows experienced a strong revival at EUR3.5bn. Interestingly these fixed income flows are maintained across all categories. European Govies ETF inflows at EUR1.2bn are close to the one-year record high. Developed market corporate bonds benefited from a more positive environment with EUR807M and EUR659M for investment grade and high yield corporate bonds respectively. Interestingly nearly three quarters of the IG corporate bond flows concerned US ETFs as higher yields and decreasing fears of interest rate increase favoured the US market. Emerging debt indexations were also in favor with EUR388M of inflows, after 5 months of outflows.
■ Commodities flows were positive at EUR90M with positive flows on broad commodity ETFs while there were outflows of EUR71M on precious metal ETFs.
*75% of MSCI ACWI NTR +9.82%, and 25% of the JPM Global aggregate +7.67% between 31/12/14 and 31/10/15 in EUR