Exchange-traded funds recorded €52.6 billion of inflows during October, taking the global total for 2017 to €500bn, according to research by Amundi. In Europe, inflows totalled €6.8bn for October (€80.6bn since January), with €5.8bn flowing into equity products and €1bn into fixed income products.
Globally listed equity ETFs have seen the majority of the flows in 2017, gaining €353bn in net new assets since the start of the year.
Investors in Europe and across the world have shown strong appetite for equity ETFs for the whole of 2017 thus far. Inflows into this asset class represented €41.5bn of total ETF flows in October (€353bn since January), of which €6.8bn came from Europe (€54bn since the start of the year).
Delving deeper into the asset class, ETF investors in Europe showed a marked increase in their appetite for Japanese equities, which totalled €1bn of inflows, closely followed by global equities at €985 million and equities exposed to the eurozone at €751m.
European investors’ enthusiasm for sector-based and smart beta ETFs, evident since the start of the year, was reaffirmed in October. These categories of ETFs benefited from €2.4bn of net inflows over the month, adding up to €19.2bn since January. Within this universe, during October, financial sector ETFs dominated, with more than €413m of flows into the category, followed by small-cap ETFs (€396m) and multi-factor ETFs (€239m). Since the beginning of the year, value ETFs have led the way, with more than €3.1bn going into this segment.
European-listed ETFs with equity exposure that suffered outflows during the month were principally those exposed to Germany (-€230m), as well as dividend strategies (-€147m) and minimum volatility (-€146m) ETFs.
Turning to bonds, Amundi reports that the major observable phenomenon in global demand for ETFs in October was the slight decline in government bonds: -€347m. Corporate credit ETFs were in demand, however, drawing in more than €4.8bn, while aggregate bond ETFs attracted €4.1bn.
In the European-domiciled ETF market, the asset categories most in demand during October were US corporate debt (€524m), variable rate debt (€357m) and eurozone corporate debt (€352m). Emerging market sovereign debt ETFs witnessed net redemptions of €412m. However, this segment of the bond market, which has managed to stay ahead of both variable rate and US corporate debt during the first ten months of the year, remains in the positive for the year with more than €8.2bn of inflows.