Credit Suisse Takeover: Latest Overview of the European ETF Market Landscape

On March 18th, UBS Group AG’s announced its emergency buyout of Credit Suisse Group AG. Swiss authorities orchestrated this deal to protect financial stability and avoid more market turmoil. Five weeks on, and we now have a better understanding of the situation: on April 24th, Credit Suisse lost CHF 61 billion in assets in Q1 2023 – a net asset outflow that follows on the CHF 110.5 billion clients withdrew from the bank in Q4 2022. 

At this point, this begs the question as to whether this proverbial bloodletting of billions from Credit Suisse is coming to an end. From this perspective, it can be interesting to analyze the ETF market flows since the takeover announcement. 

Over the last five weeks, there has been an observable increase in net flows across the entire European ETF market. Specifically, European ETFs recorded positive flows totalling almost €15 billion over the period from March 17th to April 21st. The graph below shows the total weekly flows of European ETFs over that period. 

Conversely, UBS Asset Management (“UBS AM”) and Credit Suisse Asset Management (“Credit Suisse AM”) recorded significant outflows – and more particularly in the two weeks following the historic merger, as shown in the graph below. In the second half of March, outflows from UBS AM amounted to €1.463 billion (1.77% of its ETF AuM), while Credit Suisse AM saw outflows of €136 million (2.23% of its ETF AuM). In comparison, the 10 largest European ETF issuers (excluding UBS-CS) recorded positive flows totalling almost €16 billion.

However, it is worth noting that the asset outflows for UBS AM and Credit Suisse AM have reversed in early April. Overall, European ETF issuers had significant inflows since the beginning of April, UBS AM and Credit Suisse AM included. In total, the ETF business of both asset managers saw net inflows of €905 million. 

Furthermore, it should be mentioned that the new giant holds €88.5 billion (as of April 21st) in total of AuM in European ETFs, thus ranking 4th among the largest ETF issuers in Europe. Based on current figures, the newly-formed group surpasses the behemoth, Vanguard, in ranking.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.