European exchange-traded (ETF) fund promoters suffered net redemptions in August – the first overall negative flows since February 2016.
Outflows were driven primarily by equities, as investors pulled out €8.8 billion from European ETFs, according to the latest fund flow report from Refinitiv.
The negative flows, combined with negative performance of underlying markets, led to a decrease in assets under management in Europe’s ETF industry – from €772.8 billion in July, to €757 billion in August.
Bond ETFs posted the highest inflows in the industry, with €3.3 billion of new investor cash, whilst equity ETFs saw the highest outflows (€12.2 billion), but still held the lion’s share of assets with €504 billion.
Detlef Glow, head of Europe, Middle East, Africa research at Refinitiv said: “These flows could be seen as a sign that investor concerns have materialised about decreasing company earnings, an increased volatility in stock markets globally, a new crisis in the Persian Gulf region, and a new stage in the trade war between China and the US, as well as a possible hard Brexit.”
At €0.2 billion, commodity ETFs had the second highest inflows, followed by mixed-asset ETFs (€0.1 billion). Ucits ETFs saw outflows of €0.1 billion, while money market ETFs also saw redemptions of €0.1 billion.
The overall redemptions dragged the 12-month average down to €4.6 billion from €5.5 billion in July.
A recent report by BlackRock found that exchange-traded products saw overall outflows of $7 billion (€6.3 billion) across Europe, Middle East and Africa. It was the largest monthly outflow on record, according to the asset manager.
The outflows were exclusively out of equity products, which had $13 billion in redemptions – another record, and which compares to a previous record of $5.4 billion in April 2012, the study found.
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