Developed investment grade and developed government bond ETFs saw the most inflows across all asset classes last month, as fears of a full blown trade war between the US and China spooked investors.
According to data from TrackInsight, developed investment grade bond ETFs saw the highest flows with €9bn in June while developed investment grade bonds saw €6bn inflows, as investors fled into safe haven assets.
In the latest trade war saga, the European Commission threatened retaliation on $300bn of US products "across sectors of the US economy" if President Donald Trump went ahead with his tariffs on the car industry amid his claims the European Union was "as bad" as China.
Furthermore, the Chinese government last month also vowed retaliation in response to Trump's $200bn trade tariffs threat on Chinese goods, claiming it will "take comprehensive quantitative and qualitative measures".
US large cap ETFs reversed the €13.9bn inflows seen in May with outflows of €60m amid the heightening tensions while developed high yield bond ETFs, a typically risk-on asset, posted outflows of €3.6bn.
Tariffs threats and a rising US dollar plagued emerging market assets with Asian large caps seeing outflows of €614m, while emerging stock and emerging bond ETFs were also in the red with outflows of €6.9bn and €370m respectively.
European large cap ETFs continued to remain unloved from investors amid continued concerns surrounding Lega and the Five Star Movement's coalition. The asset class posted outflows of €4.9bn following outflows of €4.5bn in May.
Global stock and small cap ETFs once again saw positive flows of €3.7bn and €6bn respectively.
TrackInsight's data covers both US and European-listed ETFs, which together comprise roughly 70% of the total market.
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