Denoiseux Vincent Lyxor ETF Money Monitor

Lyxor ETF Money Monitor May 2020

Lyxor ETF Money Monitor: The market recovery that started in April carried through in May for most asset classes.  Fixed Income (€38.0bn) recorded particularly strong flows into corporate bond exposures …

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Vincent Denoiseux, Head of ETF Research and Solutions at Lyxor Asset Management

ETF flows:

ETFs gathered €5.4bn in May. Fixed Income ETFs added €6.2bn while Equity ETFs had limited outflows of €-0.8bn.

ESG ETFs continued their strong trend with €2.4bn of inflows, in a record year so far (€10.6bn).

Fixed Income funds and ETFs gathered a combined €38.0bn in net new assets. €31.8bn went into open-ended funds and €6.2bn to ETFs.

Equity funds and ETFs had more muted flows despite the positive performance of their underlying indices. Equity funds gathered €9.3bn, with €10.1bn into open-ended funds (predominantly Sector Funds) and Equity ETF outflows of €-0.8bn.

Smart Beta ETF outflows increased to €-1.0bn. Smart Beta ETFs are now suffering their worst yearly outflows in five years (€-4.1bn YTD

Flows summary for the European ETF market in May 2020.

What happened last month?

– Equity ETFs had €-0.8bn of outflows. 

– Fixed Income ETFs gathered €6.2bn over the same period.

– Another strong month for ESG ETFs with €2.4bn in net new assets.

In May, governments around the world started a gradual easing of lockdown restrictions to revive economic activity while controlling the spread of Covid-19.

New stimulus measures were also announced in Europe and the performance of risk assets was well supported as a result.

The corporate credit market enjoyed not only strong performance in Europe and the US, but also strong inflows.

This momentum was supported by aggressive central bank support including the US Fed’s decision to purchase corporate bonds on the secondary market using ETFs.

Such an unprecedented move was followed by heavy flows into that market segment.

It also supported further spread compression in the corporate credit market both in Europe and the US.


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