Marlène Hassine Konqui, Head of ETF Research, and Kristo Durbaku, ETF Research Analyst at Lyxor ETFs report that ETF flows have slowed as sentiment reverses.
“European ETF market flows slowed slightly in June, with net new assets falling to EUR757 million from the EUR1.1 billion we saw in May. Sentiment reversed yet again, with fixed income ETFs attracting most of the inflows (EUR1.1 billion). In contrast, equity ETFs suffered significant outflows as trade wars, China and European issues dominated the agenda (-EUR739 million).”
Fixed income ETFs saw EUR1.1 billion in net inflows in Europe, according to Lyxor, but it was the worst month ever for emerging market equities ETFs with outflows of – EUR1.6 billion.
“Policy normalisation, declining dollar liquidity, higher borrowing costs and trade tensions triggered outflows of -EUR1.6 billion from emerging market equity ETFs. These outflows mainly came from broad indices like the MSCI Emerging Markets (-EUR1.2 billion), as the trade concerns and diverging economic outlooks seemingly prompted investors to reallocate to US equities.”
However, it’s still a strong start to the year for European ETFs, Lyxor writes, with inflows of EUR25.4 billion and assets standing at EUR665 billion.