The European exchange-traded fund (ETF) market saw weaker inflows in the second quarter (Q2) of the year, according to Morningstar.
European ETF inflows of €24 billion in Q2 were down from €33.4 billion in the previous period while assets under management grew to €613.1 billion from €600.5 billion.
The increase in assets lagged that of net new money, implying net capital losses of €11.3 billion over the quarter.
US equity ETFs were on the back foot in the second quarter while emerging markets ETFs and broad eurozone exposures were sought after.
Eurozone exposures probably benefitted from a reduction in political risks, Morningstar said. Emerging markets have been enjoying a good run and the recent slide in the US dollar can only provided further support.
David Buckle, head of investment solutions design at Fidelity International, said it appeared that the US dollar bull run was now at an end.
“I think it’s now time to short the US dollar against a basket of foreign currencies,” he said.
Fixed income ETFs saw €7.4 billion of net inflows. Investor interest remains focused on higher-yielding propositions such as emerging markets bonds. However, both corporate and government US fixed income also did well.
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