European Listed ETPs Record Highest Inflows in 12 months. Deutsche Bank – Synthetic Equity & Index Strategy – Europe. Europe Monthly ETF Market Review – European Listed ETPs Record Highest Inflows in 12 months
European ETP Highlights
As of the end of July 2014, global ETP assets closed the month at $2.48 trillion rising by $221bn (+9.8%) year-to-date. European ETPs received +€8bn of cash inflows which almost doubled the inflows in the previous month (+€4bn). Equity exposed ETFs had the lion share by gathering +€5.4bn and fixed income products continued the positive trend by collecting +€2.1bn of cash inflows. Commodity based ETFs listed in Europe also saw relatively strong inflows of +€0.5bn.
Cost competitive S&P 500 ETFs benefitting from inflows
A large portion of the €5.4bn that flowed into equity based ETFs went into S&P 500 products. Vanguard S&P 500 ETF (VUSA LN) and iShares Core S&P 500 UCITS ETF (CSSPX SW) collectively benefitted from +€1.7bn of inflows. This is consistent with the recent trend where investors have been re-allocating their investments into cost competitive products. This is evidenced by the sharp increase in shares outstanding for these two products even during periods of market sell-off.
China’s loosening monetary policy boosts flows into ETFs exposed to China
ETFs exposed to Chinese equities were the major contributors to flows into Emerging Markets in July. China’s loosening of its monetary policy helped equity markets where we saw CSI 300, HSCEI and MSCI China return 8.55%, 7.69% and 7.34% respectively in July. db x-Trackers Harvest CSI300 (RQFII GY) and Lyxor ETF China Enterprise (ASI FP) received the largest inflows during this period. Investors of these ETFs also benefitted from the weakening of the EUR where their return would have been boosted by an additional c.2% in July (month-on-month return).
Outflows from sector based ETFs
Although equity ETFs saw significant inflows, sector based ETFs experienced outflows of -€274mn in July. We observed 7 out of the 10 GICS sectors lose ETF investment flow last month where Financials experienced the greatest outflows. Only Materials, Healthcare and Telecommunication Services sectors benefitted from modest inflows.
Strongest commodity inflows since November 2012
Commodity based ETPs collected +€529mn of net flows which is the largest recorded figure since November 2012. Gold and broad based ETPs benefitted the most where we saw the Source Physical Gold ETF (SGLD LN) receive +€108mn of net flows.
