European ETF industry adds €8.5bn in net new assets during June

Jul 19th, 2017 | By | Category: ETF and Index News

Net new assets (NNA) added to the European ETF industry during June 2017 totalled €8.5 billion with fixed income ETF net inflows (+€4.5bn) outstripping those for equity ETFs (+€4.0bn) for the first time since September 2016. These were the findings according to European ETF provider Lyxor’s monthly flows analysis.

Euros Currency Cash Money Net Inflows

Total assets under management in the European ETF industry as of the end of June was €578bn.

The strong demand for fixed income ETFs represented the segment’s highest net inflows since July 2016. Corporate bonds maintained strong inflows at €1.8bn as European corporate bonds continued to rally. Emerging debt ETFs gathered higher inflows compared to the previous month as the search for yield continued, with €1.4bn of NNA during June. European govie ETFs recorded positive inflows of €824 million and inflation-linked ETFs generated €196m during the month, but high yield ETFs experienced outflows of €82m.

Marlène Hassine, head of ETF research, Lyxor, commented: “Tapering hints from key central banks, mixed inflation pressure, and questions about the global growth pulse forced investors to revise their normalisation expectations.”

In terms of equity ETF flows, Lyxor notes that Europe-focused equity ETF inflows decreased substantially compared to May. Only €860m of new assets were generated for this segment as export-driven countries and sectors were sold off in Europe as the euro surged. US equity ETFs generated €392m of NNA, despite mixed macroeconomic news flow. Global ETFs inflows also slowed, to €634m while Asia Pacific equity ETFs recorded much higher inflows of €866m and emerging market equity ETFs sustained inflows of €1.4bn. Once again, emerging markets flows were almost exclusively focused on broad-based ETFs, rather than single countries. Smart beta ETF inflows amounted to €584m. Income-generating ETF flows were back in positive territory with €181m of inflows, but value ETFs experienced a slowdown with NNA of just €294m.

Commodities flows turned negative at –€56m with outflows mainly focused on broad commodity ETFs.

The report notes that total ETF assets under management were up 12% at the end of June compared to the end of 2016, reaching €578bn, including a positive market impact of 2%.

Source: Lyxor.

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