Lyxor ETF Barometer – European Smart Beta ETF Market Trends Q2 2017

After slowing at the end of Q1, European Smart Beta ETF market flows were back on a positive track in Q2 2017 at EUR1.6bn…..

Q2 2017 in brief

Marlène Hassine – Head of ETF Research – Lyxor ETF

Net New Assets (NNA)  for the first six months of the year amounted to EUR3.4bn. All told, total Assets under Management were up 19% vs. the end of 2016, reaching EUR 32.6 billion (including a positive market impact of 5.6%). Flows were steady throughout the quarter, especially in income generation and value strategies as investors kept up their search for yield and alternative sources of return.

Risk-based ETF outflows ceased in Q2. Inflows amounted to EUR116M. 

EUR1.5bn in Q4 2016. Outflows decelerated mainly on Min Vol/ Min Var ETFs at EUR58M vs. EUR1.7bn in Q4 2016. On these ETFs, flows started to reverse in August and outgoing money accelerated in September at EUR602M. Interestingly, these flows were split between outflows from US and inflows from European underlyings respectively of EUR125M and EUR111M. This was in a context of decreasing uncertainty on political risk in the US and in Europe.

Flows into fundamental ETFs increased in Q2 at EUR743M vs. EUR454M in Q1.

Income generation strategies gathered most of these flows with EUR705M in a context of low interest rates, especially for global exposure ETFs.  Among other micro weighted strategies, flows were back in positive territory in Q2, gathering EUR126M.

Factor allocation ETFs inflows halved in Q2 with EUR720M vs EUR1.5bn in Q1.

The value factor continued to gather most of the flows with EUR766M of inflows, mainly on European underlyings.  This trend toward value did however slow in June with EUR242M vs. EUR688M in May. Outflows continued from low volatility factor and multifactor ETFs (-EUR219M

Source: ETFWorld

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