European ETFs Reach Record in April05.12.2014
Exchange-traded funds and products listed in Europe had record net new inflows last month pushing assets to an all-time high and this growth is expected to accelerate according to Hector McNeil, co-chief executive of Boost ETP.
ETPs listed in Europe gathered a record level of $9.2 billion in monthly net new assets last month which pushed assets in the region to a new record high of $449.7 billion, according to preliminary data from consultancy ETFGI’s ETF and ETP industry insights report.
Equity products had the largest net inflows of $5.2 billion, followed by fixed income with $2.9 billion, and then active ETFs/ETPs with $460 million.
Hector McNeil, co-chief executive of Boost ETP, the UK-base issuer which has been acquired by WisdomTree in the US, told Markets Media in an email that growth is being driven by investor appetite for equities.
“Investors generally are moving out of fixed income due to low yields and looking for returns and yields in the equity markets,” McNeil added. “This is reflective in rising M&A and IPO activity. I expect this growth will accelerate as investors continue to invest heavily in equities.”
Tradeweb also had increased purchases of European-listed ETFs in April, particularly for equity products, on its ETF trading platform. “Buys” in equity ETFs were 48% of overall traded volume, an increase from 34% in March.
Last month BlackRock’s iShares gathered the largest net ETF/ETP inflows in Europe with $2.6 billion, followed by Source, the UK-based issuer acquired by US private equity firm Warburg Pincus this year, with $1.7 billion. In third place was Detusche Bank’s DB x-trackers/DB ETCs with $1.1 billion in net inflows according to ETFGI.
BlackRock said in its ETP Landscape report for April that Europe-listed ETPs gathered $9.1 billion in April, the tenth consecutive month with positive flows and the highest month since Jan 2009.
From the start of this year until the end of April, European-listed ETFs/ETPs had net inflows of $20.3 billion, three times the $6.9bn gathered in the first four months of last year according to ETFGI. Fixed income products had the largest net inflows of $9.8 billion through to the end of April, followed by equities with $8.7bn, and active products with $959 million.
The BlackRock report said: “Global ETPs gathered an impressive $33.5bn in April, not typically a strong month of the year for industry growth. It was the best April on record for the industry.”
BlackRock said that emerging markets equity gathered $5.9bn in April, taking back over half the money that had flowed out since the start of the year.
“The majority of April’s activity was linked to short covering and the regained momentum ground to a halt in the second half of the month,” BlackRock added. “However, the category remains attractive on a historical basis and relative to other asset classes for long-term investors who can withstand the inherent higher volatility.”
The highest emerging market flows in April were $0.7 billion in funds with exposure to India, which is in the midst of its election according to BlackRock.
ETFGI’s report said the global ETF/ETP industry also hit a record high of $2.49 trillion in assets at the end of last month.
Deborah Fuhr, managing partner at ETFGI, said in the report: “In April as was the case in March investors continued to show a strong preference to equity allocations. Outside the US, developed markets improved slightly, European equities continued to strengthen, while emerging markets remained flat for the month.”