Monthly European ETF Market Trends

European ETF Market flows resumed in October 2014 after the September break. NET NEW ASSETS (NNA) during this month amounted to EUR6.1bn, slightly above August 2014 level. Total Assets under Management are up 22% vs. the end of 2013, reaching EUR351bn, and including a significant market impact (+15.5% [1]).

US, European equities and corporate bonds registered 12-month record high inflows in an increasingly volatile environment on the first 15 days of the month (VSTOXX up from 17.9% to 31.5% from the 30/9 to 16/10) and still declining interest rates in Europe (10 year German yield down 0.9% to 0.84%).

• Equity indexations saw significant inflows at EUR3.9bn. Developed market equity ETFs have been favored by investors with one year record high inflows at EUR5.2bn, 50% above past July 2014 record. Inflows have reached 12-month record high on both US and European indexations respectively at EUR 3.5bn and EUR1.8bn. On the opposite, emerging markets equity recorded one year record high outflows of EUR1.1bn, mainly concentrated on broad indexations.

  Interestingly Smart beta ETFs inflows reached a one-year record high at EUR426M, with NNA totaling EUR1.8bn over one year.

• Fixed income indexations inflows have reached a 12-month record high at EUR2.4bn. Interestingly these fixed income flows have concerned Developed market corporate bond indexations with EUR1.8bn of inflows.

  They have benefited from a (still) decreasing interest rates environment in Europe, fuelled by deflation fears, pushing investors in the IG corporate bond segment where default rate are still very limited.

  US govies also continued to see strong inflows at EUR320M.

EUROPEAN ETFS IN OCTOBER 2014 – NET INFLOWS (EURM)