Investors turned to riskier assets in November as equity ETFs captured the majority of the inflows in the month as fixed income ETF and commodity ETP flows fell below the year’s average, according to Société Générale’s recent ETF market signals report.
Across all asset classes, European and US-listed ETFs recorded $64.2bn in net flows in November which nearly doubles the October’s creations of $38.5bn.
Equity ETFs saw inflows of $51.5bn, a two year high for the asset class. The assets were spread across all regional exposures, sectors and factors however, US equities reported the most significant inflows for the month having rebounded from their negative net flows in October.
US equity ETFs pulled in $12.5bn of new assets for the month, ahead of emerging markets and European equity ETFs which attracted $4.9bn and $2.3bn, respectively.
SocGen said investors favoured more cyclical sectors such as IT and financials over defensive exposures such as consumer staples which has been an ongoing trend for the last three months.
Environmental, social, and governance (ESG) investing remains the most popular theme within equity ETFs having attracted nearly $2.1bn in inflows. Real estate, financials and IT ETFs had modest inflows of $1.1bn, $1.4bn and $1.5bn, respectively.
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Within fixed income, institutional-grade ETFs attracted $2.4bn worth of assets, ahead of emerging market bond ETFs with $1.8bn and high yield corporate bond ETFs with $690m. Govies was the only exposure within fixed income or equities to see negative net flows with a loss of $846m.
Net new assets of fixed income ETFs amounted to $14bn, the lowest volume since May.
Elsewhere, gold-backed ETPs saw significant outflows of $1.5bn as investors’ incentives turned bullish. This caused commodity ETPs to record net redemptions for the first time in six months.