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Morningstar’s March figures show ‘negative record high’ in ETF flows

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Morningstar’s March 2020 summary of the European ETF market reveals that the industry experienced net outflows of EUR21.9 billion during the month as investors reacted to the spread of coronavirus across the globe. 

The firm writes that this is a negative record high for an industry that has become used to seeing an almost uninterrupted string of monthly net inflows since its establishment two decades ago.

Key findings for March from Morningstar included assets under management dropped by 13 per cent to EUR781 billion, levels last seen in June 2019 and weekly flows analysis showed a rebound in late March as investors found solace in stimulus measures.

According to Morningstar, equity and bond ETFs recorded net outflows of EUR13 billion each. On the other hand, commodities attracted EUR3 billion of inflows, with gold proving again to be a haven at times of stress.

Heaviest outflows were experienced at UBS and iShares, while ETFs from Vanguard saw significant inflows.

Jose Garcia-Zarate, Associate Director, Passive Strategies, says: “We haven’t seen figures like these even in the darkest days of the global financial crisis of 2008 or during the height of the eurozone debt crisis. To put this in context, the previous net outflows high amounted to EUR8.3 billion, which was in August 2019 when weak economic indicators and a flare-up in the trade tensions between the US and China sent jitters through global equity markets. This was then followed by a sharp rebound with net monthly inflows averaging EUR15 billion from September 2019 to January 2020.”

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