Flows towards European ETFs have extended their first quarter positive trend and now exceed the EUR50 billion mark over the year to date period, according to Amundi’s latest ETF asset flows report.
Equities are still most favoured by investors as they represent nearly 65 per cent of these flows.
Amundi notes that European equities were the most attractive, especially after the outcome of the French presidential election, which cleared doubts about the future of the European Union. Emerging equities also continued on the rebound that started in 2016 by attracting more than EUR2 billion.
US equities, on the other hand, underwent a reversal of the trend with outflows of more than EUR1 billion in the second quarter, as investors have arbitrated from North America to the Eurozone.
Flows allocated to Smart Beta products amounted to EUR2.2 billion, with value and mid cap factors remaining the most popular, in line with the trend observed in the first quarter.
In the fixed income universe, the situation is essentially the same as on the equity side, with a continuation of the major trends observed in the first quarter. It is therefore emerging market debt that still receives the largest share of flows, with nearly EUR7 billion in the first half of the year.
As far as credit is concerned, floating rates are still favoured by investors who have allocated nearly EUR3 billion to this asset class since the beginning of the year. Next comes American corporate debt, which continues to offer a much higher return than its European equivalent and has attracted nearly EUR2 billion.
In a continuing interest rate environment, the search for yield remains the main driver of fixed income allocation.
The outflows were concentrated on US inflation-linked bonds with more than EUR1 billion, as expectations of price increase in the United States that followed the election of Donald Trump have been largely revised downward in recent months.
Finally, Amundi notes a renewed interest in commodities. The asset class has been allocated EUR2.4 billion over the first half of the year, already as much as for the whole of 2016.
