Japanese equity ETFs saw strong demand from European investors in October, although overall global flows into the asset category were negative as Asian buyers made redemptions.
The promoters of ETFs enjoyed net inflows (+€6.6 bn) for October. These flows were at the same level as the flows for September but were still below the rolling 12-month average of €6.9 bn.
European and US multi-factor ETFs have seen a surge of inflows in recent months as the western world equity rally shows no sign of abating and investors are keen to avoid market timing.
High yield ETFs have been experiencing substantial outflows over recent weeks, as investors’ attitudes towards riskier bonds have cooled following a setback in the asset class’s performance.
Aggregating ETFs designated as ‘smart beta’ in a composite portfolio demonstrates that the term does not lead to the definition of an asset class with specific risk/return attributes.
Equity and bond ETFs in the US barely reacted to two big pieces of market news over the last week, although industry experts have pointed to possible movement of municipal bond ETFs.