ETF Investors Snap Up European Equities Following Rally

Quantitative easing from the European Central Bank has helped boost European stocks - and passive fund flows have followed

Kenneth Lamont 16 November, 2015 | 12:01PM

One of the prominent macro-trends of the last 12 months has been the return to favour of European equities, driven by attractive valuations and the full backing of the European Central Bank (ECB). This backing includes an unprecedented quantitative easing (QE) programme, which will run until at least September 2016 and the commitment to keep interest rates at a historically low level.

This renewed investor enthusiasm is reflected in net funds flows, with the European large-cap equity ETF sector the main beneficiary, attracting over €13 billion in new money. One of the chief recipients of these flows has been the db x-trackers Euro Stoxx 50 (DBXE). The popularity of this fund is unsurprising given its income generating potential, large size and aggressively low management fee of just 0.07%.

ETF Investors Also Look Across the Pond

Meanwhile, despite uncertainty surrounding rate rises, the US equity market remains buoyant. US large caps have experienced particularly strong net inflows over the 12 month period, helping to push the S&P 500 to record levels.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
iShares Core S&P 500 ETF USD Acc333.30 USD-1.30
Vanguard S&P 500 UCITS ETF63.69 USD-1.19
X Euro Stoxx 50 ETF 1D40.92 EUR-1.04

About Author

Kenneth Lamont  is a passive funds research analyst for Morningstar Europe.

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