Lyxor ETF Money Monitor: Fixed Income funds suffered their largest outflows on record in March 2020 (€-128.7bn). Equities recorded their second-largest-ever outflow amid the Covid-19 crisis (€-53bn)..
Vincent Denoiseux, Head of ETF Research and Solutions at Lyxor Asset Management
ETFs had large outflows (€-25.6bn) over the month, with Fixed Income and Equity ETFs losing €-13.3bn and €-13.0bn respectively.
Money Market was the only asset class were ETFs recorded positive flows (€1.3bn).
ESG ETFs remained a bright spot in March despite the challenging market context, gathering €1.0bn.
There was nowhere to hide in March 2020. Almost all asset classes lost assets – with the exception of Gold funds and ETPs.
Fixed Income funds and ETFs lost a combined €-128.7bn of outflows, with €-115.4bn from open-ended funds and €-13.3bn from ETFs.
Equity funds and ETFs had €-53.0bn of outflows, with €-40.0bn from open-ended funds and €-13.0bn from ETFs.
Smart Beta ETFs had €-2.1bn of outflows, mainly from Equity ETFs.
March 2020: fast and furious
March 2020 was an exceptionally volatile month for financial markets amid a brutal reaction to the Covid- 19 outbreak. Equity volatility and credit spreads reached levels that were last seen during the global financial crisis of 2007-8.
The market sell-off affected the returns of all risk assets, while safe assets such as government bonds and gold posted positive performance.
Trading volumes for Europe-domiciled ETFs were particularly high in the challenging market context – a mirror image of the high volumes of their underlying assets.
All asset classes had heavy outflows in March, particularly from active funds. Outflows from funds largely surpassed those from ETFs in Europe over the period.
Fixed Income funds and ETFs posted their largest outflows on record €-128.7bn.
EUR Fixed Income recorded outflows across all sub-categories.
In USD Fixed Income , Government Bonds remained the safe asset of choice. Riskier Fixed Incomesub-segments such as High Yield and EM debt suffered very significant outflows.
Equity funds and ETFs experienced the largest outflows since 2007-8 global financial crisis (€-53.0bn).
All regions were affected, withglobal equity funds sufferingthe most (€-13.8bn, p.12), followedby the US (€-12.8bn), Emerging Markets (€-11.5bn) and Europe (€-5.7bn).
Smart Beta exposures also suffered outflows (€-2.1bn). Conversely,investors rushed into safe assets such as Precious Metals, the only bright spot for Commodities(€1.7bn).
ESG ETFs weathered the challenging market context and gathered healthy inflows (€1.0bn).
Summarising the key trends for each asset class may not be comprehensive enough considering complexity of the current market environment.