Europe-listed ETFs have seen a strong start to 2017, recording €9.4 billion in net new assets during February, nearly twice the one-year average of €4.9bn. According to analysis by Lyxor, the ETF arm of Sociétié Générale, total assets under management are up 7% compared to the end of 2016 to reach €551bn.
Marlene Hassine Konqui, Head of ETF research, Lyxor.
Marlène Hassine Konqui, Head of ETF research at Lyxor said: “Both developed and emerging markets equity and fixed income ETFs saw positive flows in a risk-on environment supported by an upbeat picture of macroeconomic data across markets. Both US and European ETFs benefited from this improved situation with €893 million and €1.3bn of net inflows respectively. Significant inflows into global equity ETFs (€706m) also continued to reflect this increased optimism.”
On the emerging markets side, flows underwent a trend reversal with ETFs adding €795m in net new assets. Broad emerging markets index ETFs saw two thirds of these flows while flows into emerging country ETFs continued to be sustained mainly by India.
Smart beta ETFs also saw significant inflows of €1.1bn. “Value ETFs continued to benefit from the rotation towards more cyclical strategies with €918m of inflows, a one year record high. Fundamental strategies on Japanese ETFs also attracted some flows at €212m,” said Konqui.
In the fixed income space, ETF inflows reached a seven-month high of €3.2bn, with these flows mainly focused on emerging debt (€1.2bn) and high yield (€427m) ETFs. European sovereign debt ETFs saw limited flows. “In an improving economic environment, flows into inflation-linked ETFs reached a one year record high at €948m. Furthermore, flows poured into short bond strategy ETFs, at €365m, in an environment of increasing political risk in Europe,” stated Konqui.
Commodity ETFs also saw inflows, with €209m of net new assets created in February, although this is down significantly from the €670m seen during January.