The European ETF industry enjoyed strong estimated net inflows of €20.9bn over the course of July.
These flows were way above the rolling 12-month average of €16.2bn. If the European ETF market can maintain the current level of inflows, the overall inflows for the year 2024 will reach a new all-time high with estimated net inflows between €180bn and €210bn.
The inflows for July were driven by equity ETFs totalling €11.2bn, followed by Bond ETFs at €6.9bn, Money Market ETFs (€2.9bn), alternatives ETFs (€0.3bn), and mixed-assets ETFs (€0.1bn), while commodities ETFs faced estimated net outflows of €500m.
A view on the top of the league table of the best-selling Lipper classifications shows a recurring picture as ETFs classified as Equity US and Equity Global led the table of the best-selling classifications by a wide margin with inflows of €4.6bn and €3.8bn, respectively.
Conversely, it was a bit surprising to see Money Market USD and Money Market EUR on position three and five on the best-selling table with €1.6bn and €1.3bn inflows, since money market products play normally only a minor role in the European ETF industry.
Even more interesting, it seems like European investors bought into the rally of US Small and Mid-Caps, which recorded inflows of €1.2bn, since the classification was the second best-performing Lipper Global Classification at 7.7% for July.
Despite the leading position of equity ETFs with regard to the overall inflows, the table of the 20 best-selling Lipper Global Classifications was dominated by bond products.
While the inflows into money market products could be seen as sign that investors want to take profit from the inverted yield curves, the inflows into the best-selling bond classifications tell a different story, as European investors piled €1.4bn into Bond EUR Corporates, €600m into Bond Emerging Markets Global in Hard Currencies and €600m into Bond EUR High Yield.
On the other side of the table, Commodity Blended faced the highest outflows overall for July at €700m.
Equity China and Equity Japan both recorded €400m outflows. The outflows from Equity Japan might be caused by investors who want to take profits prior to the expected rate hike by the Bank of Japan (BoJ) at the end of July 2024.
In addition, it looks like European investors decreased or transferred some of the emerging markets risks in their portfolios, since Equity Emerging Markets Global Small & Mid-Cap posted outflows of €200m, while Bond Emerging Markets in Local Currencies also saw outflows of €200m.
Meanwhile Equity Emerging Markets Global and Bond Emerging Markets in Hard Currencies saw inflows of €300m and €600m, respectively.
Detlef Glow is head of Lipper EMEA research at Refinitiv.
This article is for information purposes only and does not constitute any investment advice.
The views expressed are the views of the author, not necessarily those of Refinitiv Lipper or LSEG.
