BlackRock saw inflows into its European ETF range slow in Q1 as investors turned away from fixed income due to changing US rate cut expectations.
According to data from ETFbook, the world’s largest asset manager captured $15.2bn inflows last quarter, a 29.4% market share, taking its overall assets under management (AUM) to $830bn.
A record year for fixed income ETFs was a key driver behind the firm’s $71bn inflows in 2023, with the US giant now commanding a 44.7% share of the market.
With markets not pricing in as many interest rate cuts from the Federal Reserve this year, demand for fixed income ETFs has waned, especially in the last two months.
After strong inflows of $8.4bn in January and a record 2023, demand slowed to $3.4bn and $1.3bn in February and March, respectively.
In particular, the iShares Core S&P 500 UCITS ETF (CSPX) saw $4.8bn inflows over the quarter, the most across all European-listed ETFs, while investors piled $3.2bn into the iShares Core MSCI World UCITS ETF (SWDA).
Overall, inflows into exchange-traded products (ETPs) in Europe totalled $52bn in Q1, driven by demand for core US and global equity exposures.
Closely behind BlackRock were DWS and Vanguard which captured $8.3bn and $6bn inflows in Q1, respectively.
The German asset manager continued to see strong demand for its Xtrackers EUR Overnight Rate Swap UCITS ETF (XEON), in particular, which took in $2.1bn net new assets, the fourth-highest across all ETFs.
Meanwhile, demand for Vanguard’s core range remained solid, with $1.5bn flowing into the Vanguard S&P 500 UCITS ETF (VUSA).
After a year of outflows in 2023, UBS Asset Management posted a strong $3.9bn inflows alongside Amundi and State Street Global Advisors (SSGA) which captured $5.4bn and $4bn net new assets, respectively.
SSGA’s decision to slash fees on its physical S&P 500 UCITS ETF (SPY5) last October has resonated with investors. The ETF saw $3.4bn inflows in Q1, the second-highest across all ETFs.
Chart 1: Top 10 ETF issuer inflows in Europe in Q1
ETF issuer | Q1 flows ($,bn) | AUM ($,bn) | Flows market share (%) |
|---|---|---|---|
BlackRock | 15.2 | 830 | 29.4 |
DWS | 8.3 | 198 | 16.1 |
Vanguard | 6 | 136 | 11.6 |
Amund | 5.4 | 241 | 10.4 |
SSGA | 4 | 77.9 | 7.7 |
UBS AM | 3.9 | 103 | 7.6 |
JP Morgan AM | 3.8 | 25.1 | 7.4 |
HSBC AM | 3.7 | 37.7 | 7.1 |
Invesco | 2.8 | 72.5 | 5.5 |
BNP Paribas AM | 1 | 28.1 | 1.8 |
Source: ETFbook
JP Morgan Asset Management’s ongoing dominance of the active ETF space helped it secure $3.8bn inflows over the quarter, driving its overall AUM to $25bn.
In particular, investors piled a combined $2.1bn into the JPM US Research Enhanced Index Equity (ESG) UCITS ETF (JREU) and the JPM Global Research Enhanced Index Equity (ESG) UCITS ETF (JGEP).
At the other end of the spectrum, it was a tough quarter for Legal & General Investment Management (LGIM) which suffered $1.5bn outflows, the most across all ETF issuers.
