Refinitiv: The promoters of ETFs in Europe faced in August the first net outflows since February 2016….
By Detlef Glow, Lipper’s head of EMEA research at Refinitiv
These led, in combination with the negative performance of the underlying markets, to a decrease in assets under management in the European ETF industry.
In more detail, the assets under management in the European ETF industry decreased from €772.8 bn as of July 30, 2019, to €757.0 bn at the end of August.
The decrease of €15.9 bn for August was driven by net outflows (-€8.8 bn), while the performance of the underlying markets contributed €7.0 bn to the outflows in assets under management.
With regard to the overall number of products, it was not surprising equity funds (€504.0 bn) held the majority of assets, followed by bond funds (€219.9 bn), commodity products (€21.4 bn), alternative UCITS products (€5.9 bn), money market funds (€3.7 bn), mixed-assets funds (€1.9 bn), and “other” funds (€0.1 bn).
Fund Flows by Asset Type
Since the European ETF industry in August faced outflows for the first time since February 2016, it is clear that the level of estimated net flows into ETFs stood below average for the month.
In more detail, the net outflows in the European ETF industry for August (-€8.8 bn) dragged the monthly rolling 12-month average down to €4.6 bn from €5.5 bn in July 2019.
As the outflows from ETFs were driven by equity funds, these flows could be seen as a sign that investor concerns have materialized about decreasing company earnings, an increased volatility in stock markets globally, a new crisis in the Persian Gulf region, and a new stage in the trade war between China and the U.S., as well as a possible hard Brexit.
That said, it was to be expected that bond ETFs were the asset type with the highest net inflows (+€3.3 bn), followed by commodity ETFs (+€0.2 bn), mixed-assets ETFs (+€0.1 bn), and ‘other’ ETFs (+€0.002 bn).
Conversely, equity ETFs (-€12.2 bn) faced the highest outflows in the European ETF segment, bettered by alternative UCITS ETFs (-€0.1 bn) and money market ETFs (-€0.1 bn).
This flow pattern drove the overall net flows to €42.8 bn for 2019.