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European ETF Market flows slowed down in September 2016

Net New Assets (NNA) during this month amounted to EUR2.0bn, significantly below the year to date average of EUR3.2bn. Total Assets under Management are up 7% vs. the end of 2015, reaching EUR480bn, and including a market impact of +3.7%...

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Net New Assets (NNA) during this month amounted to EUR2.0bn, significantly below the year to date average of EUR3.2bn. Total Assets under Management are up 7% vs. the end of 2015, reaching EUR480bn, and including a market impact of +3.7% [1]. US equities and Emerging assets benefited from a less uncertain environment following comments by the Fed.

Equity ETFs inflows receded in September at EUR865M. Among developed countries, US exposures gathered most of the ETF inflows at EUR555M fueled by the Fed’s positive comments on the strength of the economy and its willingness to normalize before year end. After two months of strong outflows, European ETF redemptions nearly stopped at just EUR203M. Flows on Japan continued their negative trend as current policies are seemingly unable to decisively rekindle reflation dynamics. Emerging markets equities continued to gather flows albeit at a slower pace at EUR580M, mainly concentrated on broad indices.

Reduced uncertainties on the US market lead to significant outflows on Minimum Volatility products at EUR602M. Overall, Smart Beta flows reversed this month for the first time this year with EUR686M of outflows following a record year of inflows.

Fixed income ETFs also saw reduced inflows at EUR1.0bn. This month, fixed income flows continued to focus on investment grade corporate bonds ETFs. The search for yield in a low return environment continues to be a major theme with significant flows on Emerging govies at EUR1.3bn. Inflation linked bond ETFs kept gathering positive flows at EUR164M.

Commodities flows were very limited at EUR73M with positive flows on Gold ETFs at EUR166M vs. EUR93M outflows on broad indices

Lyxor Research , October 12

Article also available in : English EN | français FR

Footnotes

[1] 75 of MSCI ACWI NTR +3.0% and 25% of the JPM Global Aggregate +5.7% between 31/12/15 and 30/09/16 in EUR.

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