European ETF AUM rises 24% in 2015, Morningstar reports

Jan 25th, 2016 | By | Category: ETF and Index News

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Assets under management in the European exchange traded fund sector rose 24% last year to €467.4bn, according to investment research firm, Morningstar, who also back industry predictions that foresee AUM hitting the €1tn mark by 2020.

Morningstar’s 2015 ETF flows report looks at the dynamics of the European ETF market last year, finding that a combination of the region’s strongest annual net inflows coupled with a combined capital appreciation of €19.6bn across asset classes helped boost the industry.

Assets under management up 24% across European ETFs during 2015, finds Morningstar

Jose Garcia-Zarate, senior passive strategies research analyst for Morningstar.

Jose Garcia-Zarate, senior passive strategies research analyst for Morningstar, commented: “The data seems to indicate that the European ETP industry has entered a phase of strong growth; giving credence to industry predictions that foresee AUM hitting the €1tn mark by 2020. This trend is underpinned by growing awareness of the European investor community on the benefits of low-cost investing.”

Net gatherings across European ETFs amounted to €70.8bn over the course of the year, significantly surpassing the previous annual record of €51.0bn set in 2008. The industry saw record quarterly growth in the first, third and fourth quarters of the year.

Equity ETFs were most in favour, recording increases in net new assets of €42.7bn (60% of total inflows). Despite low yields in the bond market and heightened volatility in the high yield sector, fixed income ETFs attracted €23.4bn (33% of total inflows) in net inflows. Investors remained sceptical of the commodities space as evidenced by a mere €1.1bn of net gatherings. ETFs tracking alternative investments displayed a better showing, netting €2.1bn in new assets.

European investors turned their attention towards their home turf during 2015 with the most popular asset classes for equity net inflows being eurozone large-cap equity (€13.5bn), and Europe large-cap blend equity (€8.7bn). Emerging markets fell out of favour with the largest net outflows recorded across Chinese equity (-€2.0bn).

iShares remain the market leader for gatherings, attracting a net total of €28.8bn during the year. The firm, which acts as the ETF division of asset manager BlackRock, commands 46.0% of the total European ETF market, or €214.6bn in AUM. db X-trackers and Lyxor also displayed strong performances, pulling in €10.3bn and €8.4bn in net assets, respectively. Morningstar attributes their success to a switch in favour of physically-backed ETFs, a strategy that has begun to dominate the debate over preferred replication methods. db X-trackers owns the second largest market share in Europe with €55.9bn AUM (12.0%), followed by Lyxor with €48.1bn (10.3%).

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