Vanguard: July European ETF Market Review

The ETF market recorded outflows of $1.3 billion during the month, after recording outflows of $118 million in June.

  • European-domiciled ETFs saw a second consecutive month of outflows in July. The ETF market recorded outflows of $1.3 billion during the month, after recording outflows of $118 million in June.
  • Commodity ETFs were the biggest detractors from net flows, with outflows of $2.9 billion, while equity ETFs suffered outflows of $2.7 billion, more than offsetting admissions recorded the previous month ($2.6 billion).
  • Bond ETF flows turned positive with inflows of $4.3 billion, reversing the outflows of $2.3 billion recorded in June.

European-domiciled ETF flows continued to be negative in July as the market saw a second consecutive month of outflows, despite risky asset prices rising during the month. The ETF market recorded an outflow of -$1.3 billion in July, after suffering an outflow of -$118 million the previous month. While bond ETFs recorded positive net flows ($4.3 billion), these were more than offset by negative net flows in commodities and equities (-2.9 and -2.7 billion respectively). of dollars).

Within equities, core ETF strategies experienced the largest outflows, losing $6.3 billion in assets, geographic exposures to the US (-$2.5 billion), the euro zone (-1.4 billion dollars) and Europe (-1.3 billion dollars) leading the negative flows. These outflows were partially offset by positive flows in core global exposures ($247 million). Smart beta ETFs (-$887m) also saw outflows in July, mostly out of Europe, world and global exposures, as did capitalization segment (-$731m) and sector strategies. (-238 million dollars). These outflows from the asset class were partially offset by inflows into sustainable strategies, which garnered $4.7 billion in assets. Of this amount, the bulk of inflows went to exposures to the US ($2.5 billion) and emerging markets ($1.1 billion). Exposures to thematic ETFs also recorded inflows in July, amounting to $506 million.

In fixed income, total inflows of $4.3 billion were mainly attributable to flows into government bonds, corporate bonds and global exposures, which recorded new assets of $3.7 billion. of $2.8 billion and $367 million respectively. In contrast, inflation-linked ETFs, high yield and floating rate exposures suffered outflows of $1.7 billion, $490 million and $440 million respectively. US Treasury and Eurozone exposures ($2.0bn each) accounted for the majority of government bond ETF inflows, while emerging market sovereign exposures (-$840m) and China (-$233 million) recorded negative flows. Corporate bonds also contributed positively to fixed income ETF assets in July, with a gain of $2.8 billion, coming mainly from flows into ETFs from the Eurozone ($2.1 billion) and the United States. United ($901 million). These inflows were partially offset by outflows from inflation-linked ETFs (-$1.7 billion), US inflation-linked products (-$1.0 billion) and euro zone (-609 million dollars) which recorded the largest outflows. High yield and floating rate ETF exposures also suffered outflows in July, of -$490 million and -$441 million respectively.

Commodity ETFs suffered withdrawals of $2.9 billion in July, after losing $629 million in assets the previous month. All commodities ETF subcategories were in the red during the month, with broad allocations (-$2.0 billion) and vehicles excluding agriculture (-$612 million) and excluding agriculture. (-$270 million) all of which experienced cash outflows.

Vanguard UCITS ETFs

In July, the Vanguard lineup of UCITS ETFs saw net inflows of around $449 million, following positive inflows of around $1.3 billion the previous month. Flows were led by Vanguard’s range of fixed income UCITS ETFs ($334m), followed by equities ($99m) and multi-asset products ($16m). In equities, Vanguard FTSE All-World UCITS ETF ($133 million), Vanguard FTSE Developed World UCITS ETF ($59 million) and Vanguard FTSE North America UCITS ETF ($51 million) recorded the most important flows. The Vanguard FTSE 250 UCITS ETF saw outflows of -$106 million, roughly in line with the prior month.

The range of fixed income Vanguard UCITS ETFs saw inflows of $334 million in July, after seeing inflows of $117 million in June. The flows are mainly due to inflows into the Vanguard USD Treasury Bond UCITS ETF ($210 million) and the Vanguard EUR Eurozone Government Bond UCITS ETF ($138 million). The Vanguard ESG Global Corporate Bond UCITS ETF saw inflows of $23 million.

Vanguard LifeStrategy’s range of UCITS ETFs continued to attract investor interest, attracting $16 million in inflows.

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