DWS’s reign as the number two ETF issuer in Europe is set to come to an abrupt end at some point in the next few quarters following Amundi’s planned acquisition of Lyxor, however, this did not stop the German asset manager posting strong ETF inflows in Q1.
According to data from Morningstar, DWS saw €7.2bn inflows into its Xtrackers range in Q1, the second-highest across all ETF issuers in Europe, taking the firm’s overall ETF assets under management (AUM) to €129bn.
The firm’s strong Q1 was primarily driven by large inflows into the Xtrackers S&P 500 Equal Weight UCITS ETF (XDEW) which saw net new assets of €2.3bn over the three months, the third-most across all European-listed ETFs.
With investors concerned about the concentration risk of the FAAMGs in the S&P 500, XDEW was able to gather significant assets as the only equal weight ETF to offer exposure to the S&P 500 in Europe.
Recognising this demand, Invesco has recently joined DWS in launching its own version, the Invesco S&P 500 Equal Weight UCITS ETF (SPED), which listed on 8 April, ETF Stream revealed.
DWS will likely view this year as an important opportunity to pull ahead of its new rival for the number two spot, Amundi, which looks set to acquire Europe’s third-biggest ETF issuer Lyxor from Société Générale for €825m.
ETF industry reacts to Amundi plans to acquire Lyxor
Europe’s largest asset manager saw €3.2bn inflows last quarter while investors piled €3.6bn into Lyxor’s ETF range.
The acquisition is set to create an ETF business with €158bn AUM, a 13.6% market share, and some €29bn ahead of DWS.
The two issuers are still some way off BlackRock which sits in top spot with €505bn AUM and a 43.6% market share.
However, the world’s largest asset manager had an average quarter by its high standards with inflows of €15.5bn, down from €22.4bn in Q4 2020.
This drop in flows was largely driven by reversing sentiment for fixed income ETFs which saw inflows of €4.3bn, down from €9.8bn in the previous quarter.
Highlighting this, three BlackRock bond ETFs, the iShares $ Corp Bond UCITS ETF (LQDE), the iShares Core € Corp Bond UCITS ETF (IEAC) and the iShares € High Yield Corp Bond UCITS ETF (HIGH), were in the top five for most outflows in Q1 with combined redemptions of €4.5bn.
Elsewhere, State Street Global Advisors saw the third most inflows in Q1 with €6bn as its SPDR Bloomberg SASB U.S. Corporate ESG UCITS ETF (USCR) saw a “one-off” investment of €4.5bn, according to Jose Garcia-Zarate, associate director, passive strategies research, at Morningstar. USCR saw the most inflows across all European-listed ETFs over the three months.
Legal & General Investment Management (LGIM) had a strong Q1 with €2.3bn inflows as investors continued to pile into thematic ETFs. The segment saw a record €5.5bn inflows in Q1.
While Vanguard and UBS Asset Management scored €2.8bn and €2bn inflows and HSBC Global Asset Management was the only other issuer to break the one-billion inflow mark last quarter with €1.7bn net positive flows.
