Lyxor ETF Money Monitor: April was a recovery month for both the financial markets and the fund industry overall with significant inflows into most traditional asset classes …
Vincent Denoiseux, Head of ETF Research and Solutions at Lyxor Asset Management
Investors maintained a cautious bias and money markets funds and ETFs gathered most inflows.
ETFs gathered €8.1bn through April 2020. Fixed Income and Equity ETFs accumulated €8.0bn and €0.3bn respectively.
ESG ETFs continued their solid flow trend and gathered €1.4bn.
Smart Beta ETFs recorded further outflows with €-1.4bn.
Fixed Income funds and ETFs: fixed income funds and ETFs gathered a combined €30.6bn of net new assets with €22.6bn into open-ended funds and €8.0bn into ETFs.
Equity fund and ETFs: equity ETFs and openended funds enjoyed €19.1bn of net new assets, with €18.8bn into funds and €0.3bn into ETFs.
ETFs had large outflows (€-25.6bn) over the month, with Fixed Income and Equity ETFs losing €-13.3bn and €-13.0bn respectively.
Flows summary for the European ETF market in April 2020.
What happened last month?
– Equity ETFs gathered €0.3bn in net new assets.
– Fixed Income ETFs gathered €8.0bn over the same period.
– Another strong month for ESG ETFs with €1.4bn in net new assets.
Market sentiment started to recover in April after the rout triggered by the spread of Covid-19 and subsequent containment measures adopted across the globe.
Flows into riskier assets started to materialise over the month including €19.1bn into Equities.
Zooming in to sectors, April was a very strong month, with World sector funds and ETFs gathering €9.5bn. Flows went mainly to funds with exposure to the Technology, Healthcare and Energy sectors.
While the cumulative monthly flows for World sectors are already impressive, it is also worth highlighting that these sectors enjoyed daily inflows throughout April.
Flows into these sectors during April were supported by a variety of investment rationales such as:
– Healthcare: race to find a treatment and develop a vaccine.
– Technology: the increasing importance of digital through a lockdown period (ecommerce, streaming platforms, etc.)
– Energy: repositioning for a recovery of the oil price after high inventories and collapsing demand led to an 80%+ decline
Fixed Income funds and ETFs gathered €30.6bn in April 2020, of which €22.6bn went into open-ended funds and €8.0bn into ETFs.