Top 10 ETFs in May see massive inflows into bonds

Jun 28th, 2016 | By | Category: Fixed Income


Euro corporate bonds were the best-selling asset class in May as investors were willing to take more risk, according to new data from Thomson Reuters Lipper.


Euro corporate bonds were the best-selling asset class in May

Over half of the top 10 best-selling European exchange-traded funds last month were within the fixed income category as bonds saw more than €2bn of inflows, while equities suffered losses of the same amount.

Despite bonds being a firm favourite in May, equities still make up the bulk of total European investor allocation at 67% of total assets under management.

The top 10 most popular ETFs, which gathered €, are below:



Investors piled €0.4bn into this ETF in May – a potential anomaly as this one fund amassed two thirds of the total assets invested in emerging market equity ETFs as a whole across Europe last month.

2) iShares Euro Corporate Bond Large Cap UCITS ETF (IBCX)

Euro-denominated corporate bonds received €0.8bn in May, the best-selling asset class of the month. This fund  has gathered over €5.4bn since launch in 2003 and costs 0.20%. It has risen 3.5% year-to-date.

3) iShares Core Euro Corporate Bond UCITS ETF (IEAC)

Like the previous fund, this ETF also gathered €0.3bn in May, pushing total assets to €7.1 billion. It also costs 0.20% and is up 3.4% YTD.

4) iShares US Aggregate Bond UCITS ETF (IUAG)

iShares continues to dominate on the best-selling list. IUAG tracks an index of over 2,000 mixed bonds with an average duration of 7.5 years. It is a more recent launch from 2011 but has still grown to over $1.2bn in assets. It costs 0.25% and is up 5.2% year to date.

5) iShares JP Morgan Emerging Markets Bond UCITS ETF (IEMB)

As risk was back on the table in March, April and May, investors rotated billions of euros from safe haven assets like sovereign bonds into riskier debt, including emerging market paper. IEMB comes with possible steep rewards – and so far in 2016 the risk is worth it as the fund is up 8.4% YTD.

6) iShares Edge S&P 500 Minimum Volatility UCITS ETF (SPMV)

Investors still made some cautious choices last month, funnelling €200m into this minimum volatility ETF in May. It is up 7.5% year to date, a stark contrast to the plain S&P 500 index’s performance of negative 1.1% over the same timeframe.

7) iShares US Mortgage Backed Securities UCITS ETF (SMBS)

Shunned by investors as high risk and opaque after the financial crisis, mortgage-backed securities have made a comeback. SMBS was only launched in May yet has received just under €200m since then.

8) Vanguard S&P 500 UCITS ETF (VUSA)

This cheap US equity fund is a firm favourite among ETF investors and sits on the list of the 10 largest ETFs in Europe today. It is up close to 10% YTD and costs just 0.07% in annual fees. Of all the equity categories on the ETF market, European investors hold the most capital in US equities at around €66bn, Lipper found.

9) iShares Euro Ultrashort Bond UCITS ETF (ERNE)

Ultrashort bonds are popular with investors looking for a higher yield than on offer from sovereign debt. ERNE has grown to over €761m since launch in 2013. It is up 0.09% YTD and 0.07% over one year.

10) iShares Diversified Commodity Swap UCITS ETF (EXXY)

Commodities raised the most money per asset class after bonds in May. Commodities and derivatives can be volatile, however. This fund is up 9.72% YTD, but it is down close to 12% in one year. It also has a higher annual fee of 0.46%.

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