Industry Updates

US investors favour corporates over government bond ETFs in February

George Geddes

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Global equity and fixed income ETFs saw inflows of €27.2bn and €14.5bn in February, respectively, according to Amundi's monthly flows report.

From the €14.5bn invested in fixed income ETFs, 50% (€7.3bn) was in corporate bonds with the second product of choice being aggregate bonds, with inflows of just over €3bn. Regionally, Europe was divided between government and corporate bonds seeing inflows of €2.1bn and €2.7bn, respectively. The US, however, poured €4.4bn into corporate bond ETFs but government bond ETFs saw outflows of €568m.

Emerging market equity ETFs were the second most popular region for its asset class with flows of €6.4bn, just behind North America with €11.3bn. Eurozone was the only region to see negative flows in the equity market with €843m worth of net assets being sold.

Commodities have seen a significant selloff in the US with outflows of €1.7bn. Investors have most likely been seeking a higher yield as equity and fixed income funds for the region saw inflows of €16.1bn and €9.1bn, respectively.

Global flows by asset class

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Source: Amundi

The European ETF market so far this year has shown growing attention to fixed income ETFs over equity and commodities. Equity ETFs have faced two significant selloffs for the year-to-date, whilst fixed income has maintained steady inflows, according to Amundi's report.

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Source: Amundi

Looking more specifically at the equity asset class, main indices has seen cumulative flows in excess of €7bn YTD, with Socially Responsible Investing and Smart Beta far behind with €1.8 and €1.5bn. Sector and Themes ETFs have faced continuous selloffs, especially the financials sector which alone has seen outflows of €1.2bn.

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Source: Amundi

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