Global exchange-traded funds (ETFs) witnessed inflows of €14.9 billion in February, their lowest level of new money since April last year, reported Amundi.
The French asset manager’s report on the wider industry noted that global equities gained more inflows (€7.2 billion) than fixed income (€4 billion), possibly due to interest rate concerns.
However, ultra-short bonds emerged as the most popular strategy last month. Reflective of investors’ “wait-and-see attitude towards debt”, this category witnessed inflows worth €10 billion, reported Amundi. Large blend strategies registered the most significant outflows worth €10 billion in February.
European Ucits equity ETFs gained €5.9 billion, of which emerging market equities added €4.6 billion. According to the report, investors showed signs of returning to an equity risk-on stance, as they withdrew €1 billion from minimum volatility and €500 million from quality strategies.
In contrast, investors added only €0.5 billion to European Ucits fixed income ETFs in February. Corporate debt—witnessing €1.2 billion inflows to investment grade bonds—proved more popular than government debt, which saw withdrawals worth €1.1 billion.
ESG emerged as a key investment driver for global ETFs across categories. ESG strategies alone received €3.2 billion of the total €5.9 billion allocated to the European Ucits equity ETF category. ESG emerging markets was the most popular strategy, gaining almost one-third of the total allocation to equity emerging-market strategies.
Investment-grade corporate bonds was the most popular choice in the fixed income ESG category. In contrast, investors withdrew €600 million from non-ESG fixed income products.
Breaking conventional patterns, European investors allocated €0.7 billion more than their US counterparts. In the French firm’s monthly analysis of ETF flows, it was revealed that European investors committed €6.8 billion to ETFs in February. This was more than the €6.1 billion from US investors which breaks the long-running trend of inflows in the North American market usually being several times larger than European inflows.
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