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European equity ETFs raise EUR 5.9 billion in February

European equity ETFs raise EUR 5.9 billion in February

The most popular strategy was ultra-short bonds (10 billion), reflecting investors’ wait-and-see attitude towards debt.
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20 MAR, 2023

By RankiaPro Europe


Global appetite for ETFs cooled in February. Last month saw inflows of €14.9 billion, the lowest allocation since April 2022, according to Amundi data.

Equities added €7.2 billion, while fixed income saw inflows of €4 billion, possibly reflecting investor concerns about interest rate developments. European investors contributed 6.8 billion, while U.S. investors allocated 6.1 billion, breaking the long-term trend that the U.S. market is typically several times larger than the European market.

The most popular strategy was ultra-short bonds (10 billion), reflecting investors' wait-and-see attitude towards debt. Blend strategies recorded the most significant outflows ('10 billion).

European equity ETFs

European equity ETFs added €5.9 billion, with emerging market equities adding €4.6 billion. Within this allocation, broad emerging market indices proved popular (3.9 billion). European developed market equities recorded €2.4 billion, while U.S. equities recorded outflows of €2.7 billion.

Investors withdrew €1 billion from minimum volatility strategies and €0.5 billion from quality strategies, possibly reflecting a return to risk appetite for equities.

European fixed-income ETFs

This month, investors added only €500 million to European fixed-income ETFs, reflecting uncertainty about the direction of interest rates. Once again, corporate debt proved more popular: investors added 1.2 billion to investment-grade bonds and withdrew 1.1 billion from sovereign bonds.

In particular, investors added EUR 500 million to euro-denominated corporate bonds and withdrew EUR 1.4 billion from euro-denominated sovereign bonds.

Strong appetite for ESG ETFs confirmed

Of the total €5.9 billion allocated to equities, €3.2 billion went to ESG strategies, while €2.7 billion went to traditional products. As of last month, emerging markets ESG was the most popular strategy, with €1.5 billion, equivalent to around one-third of the total allocation to Emerging Markets Equity strategies.

European Sustainable Fixed Income ETFs gained €1.1 billion in February, with investment-grade corporate bonds the most popular strategy (€0.7 billion). In contrast, investors withdrew €0.6 billion from traditional fixed-income products.

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