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Lyxor ETF Money Monitor December 2018

Hassine Marlene Lyxor ETF etfs

European ETFs  flows decelerate….

By Marlène Hassine Konqui, Head of ETF Research and Kristo Durbaku, ETF Research Analyst


Net new assets in the European ETF market slowed to €2.5bn in December – well down from the €4bn we saw in November.

Equities flows collapsed (-€1.4bn), with US equities recording their first negative month (-€1.7bn) after 19 consecutive months of positive flows and Europe equities still suffering outflows (-€1.5bn).

However, emerging equities enjoyed their best month ever (+€2.8bn) and fixed income ETF inflows more than doubled, led by developed  and emerging market government bonds (€3.4bn and €1.4bn respectively).

Commodities continued their descent.

Special focus: Emerging equity ETFs enjoyed their best  month ever

In December 2018, emerging market ETFs benefited from low US interest rates, which brought record inflows into all emerging market economies.

Before this, emerging markets had suffered particularly from the intensifying trade war between the US and China.

The risk is likely to remain in the short term but shoulddecrease in the medium term as current  tight economic conditions are expected  to ease later in 2019.

This could lead to a new ongoing positive trend for EM ETF flows, especially given the historical correlation that has been observed between emerging market ETF flows and the US10-year yield.

Source: ETFWorld

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