Inflows into Europe-listed exchange traded products (ETFs) have considerably slowed down in August after a record 2017 so far, with all categories suffering subdued demand or even outflows.
According to Morningstar, August saw inflows of just €3.5bn into European-listed ETFs, the lowest monthly level since September 2016, with equity inflows hitting an 11-month low and commodity ETFs suffering the largest outflows, while demand for bond products also remained low.
Morningstar ETF also reports money-market funds saw negative flows, but overall assets under management still increased from €613bn at the end of July to €615bn by 31 August.
In a turnaround from the recent trends, the most popular funds were those tracking large US companies, though ETFs investing in European financials and stock markets also continued to enjoy stronger-than-average inflows during the month.
According to the data provider, this is a sign of ongoing confidence in the eurozone and the general health of the global economy, given the cyclical nature of European equity assets.
ETFs tracking the German DAX index were particularly popular for the second month in a row, with investors piling into the asset category ahead of the German federal elections on 24 September. Over the month to 14 September, TrackInsight has recorded €330m of inflows into German Stocks ETFs.
However, products tracking the largest European companies saw outflows in August for the first time since October 2016; commodity products suffered the largest outflows of the bunch, with net redemptions from the category for the first time in eight months.
Emerging market ETFs continued to see inflows, but these were more subdued than in the previous month. According to Morningstar, the bulk of the inflows went into a single ETF – the Amundi ETF MSCI Emerging Markets (AEEM) – which took in some €370m alone.
ETF providers
A number of providers were hit with outflows during August, with ETF Securities suffering from the run on commodities and energy products, while its precious metals funds also saw outflows.
Deutsche Asset Management saw redemptions for the first time this year, as it lost a net €80m from its ETF business. Some €540m was taken out of its MSCI World ETF, though it was counterbalanced by €500m worth of inflows into its bond products.
Smart-beta and strategic ETFs in general have been out of favour, with risk-oriented smart-beta ETFs losing some 27.4% of their assets over the past 12 months.
However, the largest provider iShares remained on top of the list, taking in €2bn overall during August, thought this figure is below its monthly average. BNP Paribas came second with net inflows of €390m, while inflows into UBS products were also lower than in the previous months.
