Lyxor ETF Money Monitor: An eventful summer for European ETF flows.In August, net new assets in the European ETF market collapsed to -€8.5bn from the €15.2bn we saw in July…
By Marlène Hassine Konqui, Head of ETF Research and Kristo Durbaku, ETF Research Analyst
Equity ETFs suffered their worst month ever (-€12.7bn).
Meanwhile, flows into fixed income (€2.2bn), smart beta (€504m) and commodities ETFs (€126m) slowed but stayed positive.
With €1.4bn of inflows, ESG ETFs continued their rise in August and brought their total for the year to €8.5bn.
Special Focus: Flight to safety
Last month’s ETF flows reflected investors’ worries over the overall economic and political environment.
There’s little doubt escalating global trade tensions and the slower global growth outlook have been driving money into defensive investments.
In August, equity ETFs recorded their worst month ever with €12.7bn of outflows.
All equity subcategories suffered.
In contrast, all safe havens were in demand. Developed market government bonds have gathered about €9.2bn YTD – a third of which has been in the last two months.
Europe government bonds have proved particularly popular, with €803m of inflows in August.
Other traditional safe havens have also been in demand, and we’ve seen strong inflows into gold ETFs (€226m in August vs. the monthly average of the last 12 months of €19m) and the best start to a year ever for income generating ETFs (€235m in August and €2.8bn YTD).
On top of all this, all smart beta inflows have been gathered in min vol/min var strategies (€590m in August and €3.2bn YTD), highlighting investors’ intentions to protect themselves against global uncertainty.