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European ETF Market flows were sustained in October 2016

Net New Assets (NNA) during this month amounted to EUR2.8bn, up 41% vs. last month and close to the year to date average of EUR3.2bn. Total Assets under Management are up 7% vs. the end of 2015, reaching EUR485bn, and including almost no market impact (+0.4%). Equity ETFs rebounded in a more confident environment.

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Net New Assets (NNA) during this month amounted to EUR2.8bn, up 41% vs. last month and close to the year to date average of EUR3.2bn. Total Assets under Management are up 7% vs. the end of 2015, reaching EUR485bn, and including almost no market impact (+0.4%). Equity ETFs rebounded in a more confident environment.

  • Equity indices saw year to date record high inflows at EUR2.3bn. Developed market ETF flows significantly increased at EUR1.1bn. Flows on European equity ETFs bounced back into positive territory at EUR314M with a specific focus on eurozone Financials, value style and UK focused ETFs. Also of interest, broad ETFs on developed indices recorded high levels of inflows at EUR598M, illustrating increased investor optimism on the overall economic outlook of this area. The more risk-on environment also impacted Smart Beta flows. Overall, they were still negative with EUR477M of outflows, and with US Minimum Volatility ETFs seeing outflows at EUR520M, whereas flows on Value Factor ETFs reached a one year record high as investors seemed to tactically position themselves to benefit from a recovery phase. Also, fueled by this more positive sentiment, emerging markets equity flows continued to be sustained at EUR867M. Inflows have been mainly concentrated on broad indices however with positive flows on China ETFs for the first time in six months.
  • Inflows on fixed income indices slowed down significantly atEUR578M, reaching their lowest level in a year. Investment grade corporate bonds continued to gather significant inflows at EUR1.1bn. Inflation linked bond ETF flows kept their positive trend with EUR472M of inflows in a context of increased inflation expectations, especially in the US. Flows on developed government bonds continued to be negative at EUR1.2bn and were not compensated this month by Emerging government bond flows that were positive but more limited at EUR300M. Finally, flows on high yield bond ETFs rebounded at EUR302M after two quiet months, corroborating to a certain extent a rebound in confidence.
  • Commodities flows went back into negative territory at EUR127M, mainly coming from outflows on broad indices at EUR176M as the oil price peaked during the month and is now on a declining trend. *including also non UCITS eligible/compliant ETFs

Lyxor Research , November 2016

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