Assets under management (AUM) of ETFs domiciled in Europe reached €622 billion at the end of October, up from €601bn the previous month, according to Thomson Reuters. October saw the addition of €6.6bn in net new assets, meaning the majority of the €20.9bn AUM gain was due to the performance of underlying markets.
The Thomson Reuters report notes the ETF market in Europe is highly concentrated.
Of the total AUM for ETFs in Europe, funds with equity exposure (€441bn) held the majority of the assets, followed by funds offering access to fixed income (€151bn), commodities (€18.0bn), “other” funds (€6.7bn), money market funds (€3.5bn), mixed-asset funds (€0.6bn), and alternative UCITS products (€0.4bn).
Funds with the largest AUM at the end of October were those that offered exposure to US equity (€93.1bn), eurozone equity (€56.5bn), global equity (€48.8bn), European equity (€36.4bn) and emerging markets equity (€30.5bn). These five peer groups accounted for 42.7% of the overall AUM in the European ETF segment, while the ten top classifications by assets under management accounted for 58.7%.
Source: Thomson Reuters
During the month, equity ETFs attracted the majority of inflows, gaining €5.8bn of net new assets. Within this segment, the highest flows were seen in products that offer exposure to global equity (€1.4bn), Japanese equity (€1.2bn) and eurozone equity (€700 million).
Inflows into the ten bestselling classifications equalled 88.5% of the overall net inflows. Thomson Reuters points out that this demonstrates that the European ETF market is highly concentrated, although the firm notes that one would expect a somewhat elevated level of concentration since investors often use ETFs to implement core market views and short-term allocation decisions that the funds are often designed for.
The report finds there is also a high level of industry concentration among ETF providers since only 19 of the 47 issuers with European-listed funds held assets of over $1bn. The largest issuer, iShares (€292bn), accounted for 47.0% of the overall AUM, significantly ahead of Deutsche Asset Management (€65.2bn) and Lyxor (63.4bn) in second and third place respectively.
Source: Thomson Reuters
The ten top ETF providers accounted for 93.3% of the overall AUM in the European ETF industry. This means that the other 37 issuers with at least one ETF registered for sale in Europe accounted for only 6.7% of the total AUM.
Thomson Reuters points out that since the European market is highly concentrated, it was not surprising to see that eight of ten largest issuers by AUM were among the ten with the highest inflows during October. iShares attracted the most new assets during the month (2.3bn), followed by Deutsche Asset Management (€1.6bn) and Amundi (€600m).