Industry Updates

BlackRock tops European ETF flows in Q2 as fixed income dominance pays dividends

€19.4bn inflows last quarter

Tom Eckett

Matterhorn with snow on it

BlackRock topped the European ETF flows leader board by some distance in Q2, mostly driven by the firm’s dominance in the fixed income market.

According to data from Morningstar, BlackRock netted inflows of €19.4bn last quarter, €14.5bn more than DWS in second, taking its European ETF market share to 44.6%.

The big inflows were driven by the firm’s control of the fixed income ETF market this side of the pond. With bond ETFs accounting for 70% of the total €33.4bn quarterly inflow, BlackRock – with a 62% market share – took in the majority of these assets.

Highlighting this, of the top 10 inflows for fixed income ETFs in Europe, all were BlackRock products barring the Lyxor US TIPS (DR) UCITS ETF (TIPG).

Overall, the world’s largest asset manager saw its iShares ETF range in Europe jump to €403bn assets under management (AUM), up from €347bn in Q1 when it saw €1.1bn outflows.

DWS further cemented its position as the number two ETF issuer in Europe with €4.9bn inflows for the quarter.

This was some way ahead of Lyxor, which holds the third spot, after the French asset manager suffered outflows of €507m in Q2. DWS and Lyxor have €96.6bn and €71bn AUM, respectively.

There were also positive flows for Amundi and UBS Asset Management which saw €1.6bn and €1.5bn net new assets, respectively.

WisdomTree also had a strong quarter amid huge demand for commodity ETCs following price collapses as a result of the coronavirus turmoil. Overall, commodity ETCs saw inflows of €6.3bn in Q2.

As a result, the ETF issuer – which has 90% of its assets in ETCs – saw inflows of €1.3bn taking its ETF assets in Europe to €23.3bn.

Meanwhile, Invesco saw inflows of €1.6bn following the decision for PIMCO to take its European ETF business in house in April.

The two US rivals had been working together for three years following Invesco’s Source acquisition in 2017 however the firms made the decision to end this partnership last year.

Amid this decision, PIMCO saw inflows of €123m taking its European ETF assets to €7.9bn.

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Jose Garcia-Zarate, associate director, passive strategies research, at Morningstar, commented: “The flows and assets data for Invesco are only reflective of its own branded ETFs.

“The initial distribution deal that PIMCO had with the now-defunct Source posed no conflicts of interest, but the situation changed when Invesco bought Source in 2017. Invesco is a rival manager of fixed income funds and has made a strong push to expand into the European ETF marketplace with its own strategies.

“In fact, PIMCO has not launched any new ETFs in Europe since 2017, and so it was a question of the company taking matters into its own hands.”


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