ETF Investment Slowest for a Year

Inflows in European listed ETFs last month of €3.5 billion were the lowest level since September 2016

Ali Masarwah 15 September, 2017 | 4:21PM

After registering dynamic growth in the first half of the year, demand for European exchange traded funds (ETF) slowed considerably in August. The inflows of €3.5 billion marked the lowest level seen in a one-month period since September 2016. The reasons for the slackening pace of inflows were many: net inflows to equity ETFs hit a 11-month low, demand for bond ETFs remained subdued for the second month running, and commodity exchange-traded products (ETPs) suffered net redemptions for the first time in eight months.

Money market ETFs, which feature short-term assets traded by banks, also saw negative flows, according to Morningstar ETF estimates.  But overall assets under management (AUM) increased slightly from €613 billion at July 31 to €615 billion at the end of August. 

Funds tracking the largest US companies enjoyed the highest inflows in August, a rare feature in a year that has seen European index-trackers dominate sales. ETFs focusing on European financial firms and indices continued to see above-average inflows in August after taking in record subscriptions in July. The demand for these highly cyclical assets indicates that investors remain confident on the growth prospects of the eurozone economy. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
iShares Core S&P 500 ETF USD Acc335.00 USD-0.24
X MSCI World ETF 1C69.92 USD0.19

About Author

Ali Masarwah

Ali Masarwah  is the editor of Morningstar.de in Germany.

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