Japan ETFs make comeback in October

US and Europe-listed ETFs received modest inflows in October of some $38bn following on from September which pulled in a two-year high of $69bn, according to Societe Generale’s recent ETF Market Signals report.

The main highlight was Japanese equity ETFs having positive inflows for the first time in six months as performances rallied. Across both US and Europe listed ETFs, Japan equity ETFs raked in $924m and $1.2bn, respectively.

In tandem with the exposure’s inflows for the month, its performance climbed significantly over September and October after minimal change over the previous eight months of the year.

For example, the Lyxor Core MSCI Japan UCITS ETF’s net asset value (NAV) climbed 3.4% in October and 5.2% in September after having only climbed 2.5% between February and August.

Elsewhere, US equities across both regions saw outflows of $4.9bn in tandem with investors seeking haven in gold and government bonds which received inflows of $1.8bn and $3.3bn.

Fixed income ETFs as a whole gained $17bn in new assets. In addition to govies receiving $3.3bn, investment grade and high yield corporate bond ETFs received $2.6bn and $1.2bn, respectively.

Despite Brexit uncertainties in the run-up to the deadline of the UK leaving the European Union, investors remained bullish for European equity ETFs. The asset class had inflows of $2.2bn.

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More sector specific, at the top of the table was environmental, social and governance (ESG) ETFs which had inflows of $2.1bn, mostly driven by European investors with $1.6bn. This was just ahead of the financial sector ETFs which pulled in $1.7bn.

At the other end of the table was material ETFs with outflows of $804m, shortly behind consumer staple ETFs with $751m.

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