January saw net inflows of an estimated €21bn (£17.86bn) to European ETF providers, according to data from LSEG Lipper, above the 12-month average rolling inflows of €13.2bn.
Equity ETFs led the inflows with €13.3bn, followed by bonds at €6bn. Money markets, alternatives, and mixed assets also added to inflows, with just commodities experiencing €3m in outflows.
Detlef Glow, head of Lipper EMEA research, said: “These inflows occurred in a further unstable market environment since the geopolitical tensions in Middle East, especially the Red Sea, increased over the course of the month and impacts from prolonged delivery times caused by the fact that shipping companies avoid the Suez channel as they don’t want their ships to be targets for the Houthi rebels.
“Nevertheless, some asset classes showed positive results while others performed negatively. Market sentiment was further driven by hopes that central banks — especially the US Federal Reserve — have reached the last phase of their fight against high and further increasing inflation rates given their rather dovish statements during/after the respective central bank meetings.”
Among equities, US funds hold the largest amount of assets with €374bn and global behind at €263.9bn. Europe, emerging markets global, and eurozone rounded off the top five with €78bn, €68.9bn, and €55.4bn, respectively. Together, the five ‘peer groups’ comprised 52.3% of assets under management in European ETFs.
“It was noteworthy that the rankings of the largest peer groups saw some movement in single positions after the market turmoil caused by the Covid-19 crisis and the following recovery,” Glow said.
“As the positions of the peer groups had been quite stable in the past, this indicates that European investors use ETFs to trade according to their market views. Even as some of these positions might be core holdings, once investors get into risk-off mode they also reduce their exposure to core asset classes.
He added: “That said, the ranking changes at the top of the league table which happened during the Covid-19 pandemic have not reversed since and now represent the new normal.”
Equity US and equity global also experienced the largest net sales for January, followed by bond EUR corporates, bond EUR high yield, and equity sector information tech. Equity China topped the list for outflows, losing €500m.
By provider, Ishares accounted for €10.2bn in inflows, followed by Amundi ETF at €3.2bn and Xtrackers at €2.8bn. Vanguard, SPDR, JP Morgan, HSBC, Invesco, Vacneck and BNP Paribas made up the top 10.