Industry Updates

Japanese equity ETFs flavour of the month in Europe: Amundi

David Tuckwell

chart, bar chart

ETFs saw €52.6 billion in global creations in October 2017, bringing the global yearly total €500bn, research by Amundi found.

Europe's ETF market - known for being mostly over the counter - continues to heat up, taking in just under €7bn, of which the vast majority, €6bn went into equity funds and €1bn into fixed income funds. Commodities and alternatives remained relatively still.

October is thus in keeping with the rest of the year, in which European investors have shown most interest in equity ETFs. But the results generalise beyond Europe, with equity ETFs attracting around 80% of new cash into ETFs globally.

Japanese equities flamed their popularity in Europe, with €1bn flying in. Second in the beauty pageant came global equities - particularly those with US exposure - taking in €985 million. Third place came Eurozone equities, with €751m.

Smart beta ETFs, initially dismissed by some as a short-term fad, are proving their staying power. European smart beta ETFs lured in €2.4bn, adding up to €19.2bn since January.

Among smart beta ETFs, interestingly, exposure to the financial services industry dominated flows, on around €400m, followed closely by small-cap exposure and multi-factor funds.

Value funds - the most popular among the single factor ETFs - have dominated on a yearly basis, however, with €3.1bn inflows.

Europe domiciled ETFs also had losers in October. Germany-tracking funds saw losses of €230m. Smart beta ETFs were also among the losers, with dividend funds and minimum volatility funds both seeing roughly €146m outflows. Another loser was government bond ETFs, which lost €347m over the month.

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