European Ucits ETF inflows reached a record high of €102bn in the first half of 2024, marking a 10% increase over the previous best in 2021, when inflows reached €92.8bn.
This surge was largely driven by the popularity of equities, which accounted for €76.6bn of the total flows, while fixed income contributed €25.1bn, according to an analysis by Amundi.
In June alone, investors added €19.3bn to European Ucits ETFs, with €16.1bn flowing into equity strategies and €3.0bn into fixed income. US equity index strategies gained €6.9bn, world indices gathered €5.4bn, and government debt saw gains of €1.8bn. These figures underscore the continued attraction of equities among investors. Globally, similar trends were observed, with equities gaining $394.5bn and fixed income $156.3bn in the first half of 2024. Total year-to-date flows for all asset classes reached $573.8bn, with more than $1 trillion added over the last 12 months.
Ucits are delivering good returns with costs declining: Efama
In the first half of 2024, investors added €25.1bn to European Ucits fixed income ETFs. Government bonds led with €10.5bn of inflows, followed by €4.6bn in money market accounts and €4.1bn in investment-grade (IG) corporate debt. Within government debt, US dollar-denominated debt was favoured, attracting €6.3bn, while euro-denominated debt saw €4.4bn in inflows.
Short-duration US-dollar bonds attracted €5.0bn, indicating expectations of stable or rising interest rates, whereas long-dated US-dollar bonds saw only €0.3bn in inflows. Conversely, €1.6bn was allocated to long-dated euro-denominated bonds, with investors anticipating further rate cuts, while €0.6bn was withdrawn from short-dated euro bonds. ESG fixed income ETF strategies garnered significant attention, with IG strategies alone gathering €4.2bn, making up almost 30% of new fixed income flows.
Ucits and alternative investment funds gained €24 billion in March
In the European equities Ucits market, US index strategies were the most popular, gaining €25.8bn, or about a third of total equity flows. Developed market indices added €23.6bn, while the all-country equivalent to MSCI ACWI saw €9.7bn in inflows.
The technology sector, particularly the ‘magnificent seven’ stocks, dominated, with IT sector strategies accumulating €5bn over the six months. In contrast, financial sector ETFs only gained €0.9bn. Sector-specific ETFs saw mixed results, with minimum volatility strategies losing €1.9bn and value strategies losing €2.3bn. Equally weighted indices saw modest inflows of €0.3bn, reflecting the strong performance of the ‘magnificent seven’. ESG equity strategies attracted €5.0bn, mostly in developed market indices, with investors favouring low tracking error strategies, highlighting the outperformance of traditional indices like the S&P 500.
