European ETF Market flows reached a one-year record low in February 2016….
Marlène Hassine – Head of ETF Research – Lyxor ETF
Lyxor Etf Barometer
Outflows during this month amounted to EUR271M. Total Assets under Management are down 5% vs. the end of 2015, reaching EUR428.5bn, and including a negative market impact (-4.2%*). Equity ETFs were hit by the increasingly risky environment while fixed income govies ETFs benefited from their safe haven status.
Equity indices saw record high outflows at EUR2.4bn. All developed equity ETFs were impacted by these outflows. European region ETFs registered EUR1.1bn of outflows in February, the first negative month since April 2015. US and Asia Equity ETF flows were also negative at EUR 821M and EUR442M respectively. Emerging market equities on the other hand saw very limited outflows of EUR124M with broad Emerging Market ETFs gaining positive flows of EUR196M. This seems to indicate that investors are cautiously reentering this area as a floor m ay h ave been found o n o il prices. N oticeably, S mart B eta ETFs gathered significant inflows of EUR907M, mainly on defensive strategies.
Fixed income indices’ inflows rebounded at EUR1.9bn. Interestingly these fixed income flows mainly concerned developed country govies. Inflows on European Govies were significant at EUR871M, benefiting from anticipations of new quantitative easing action to be announced during the next ECB meeting in March. Investors looking for safe haven investments in a highly volatile environment also favored US and German govies with inflows respectively of EUR417M and EUR332M. Flows on corporate and high yield bond ETFs rebounded slightly with a total of EUR380M, mainly on US indices.
Commodities flows continued to see positive inflows at EUR216M with inflows on Gold ETFs of EUR140M as investors searched for safe haven investments.
**75% of MSCI ACWI NTR -6.7% and 25% of the JPM Global Aggregate +3.2% between 31/12/15 and 29/02/16 in EUR