The asset raise in the second quarter of 2024 represents an 88 per cent year-on-year on increase, as European ETF assets under management (AUM) hit USD2 trillion for the first time, according to Invesco.
With NNA of USD106.6 billion in the first half of the year, net inflows into EMEA ETFs were up by 46 per cent relative to the first half of 2023, and only narrowly behind the USD112 billion seen at the halfway point in 2021, which turned out to be the strongest year on record for EMEA ETF inflows, the firm says
Equity AUM hit new all-time highs in Q2, ending the quarter at USD1.45 trillion, driven by a combination of strong inflows and market performance. At USD84.3 billion, NNA for the first half is 2.3 times stronger than seen in the first half of 2023, Invesco says.
Global equities remained the largest contributors to inflows in the quarter with USD13.4 billion, slowing slightly compared to Q1 to give USD28.1 billion NNA in the first half of the year and accounting for a third of total equity flows YTD. US equities came a very close second, with USD13.2 billion of inflows in the quarter and USD27.8 billion for H1.
European equities saw a surge of interest in Q2, with USD4.9 billion of NNA in the quarter, more than a four-fold increase in flows compared to the first quarter giving total inflows YTD of USD6.1 billion.
Although the USD16.1 billion of net inflows into fixed income ETFs was 19 per cent lower than the same period last year, fixed income NNA still punched above it by market share, Invesco says.
“Investors favoured safe haven asset classes, with developed market government bonds and cash management representing 83 per cent of fixed income NNA over the quarter. With USD8.7 billion in NNA, developed market government bonds were the strongest category over the quarter, and while the split between US Treasuries (USD4.2 billion) and Euro government bonds (USD3.8 billion) was equal, it is notable that USD2 billion of the US Treasury inflows went into ETFs focused on 0-1 year maturities, which may have been used in favour of cash management products.”
“While the macroeconomic backdrop remains supportive for financial markets generally and should continue to lead strong demand for ETFs in the second half of the year, political and geopolitical risks remain”, says Gary Buxton, Head of ETF EMEA at Invesco. “The snap election in France appears likely to lead to increased uncertainty in coming months while the main focus for the second half will be the US presidential election in November.
“Questions over concentration in markets are likely to persist, and we have seen modest flows returning to equal weight approaches as the performance gap has widened. Delivery of easier monetary policy in the second half of the year may prompt investors to look again at some of the other unloved parts of the market with thematic exposures a potential beneficiary.”
