Bond funds drive European ETF market recovery in April
Fixed income responsible for over 90% of net inflows
Over the course of April, the European ETF industry enjoyed positive net inflows of €8.7bn, buoyed near entirely by the €8.1bn, or 93%, contribution of bond funds, according to the latest report from Refinitiv.
Equity, money market and alternative UCITS ETFs all added to the positive contribution, while commodities ETFs were the greatest detractor, with net outflows of €0.7bn, which brings the total year-to-date figure for the European ETF market to net outflows of €1.4bn.
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Despite fixed income's top ranking this month, equity funds remain the largest section of the market, with 65% share versus bond's 30%, also dominating the Lipper classifications by assets under management (AUM).
Equity US stands as the clear leader with €149.5bn AUM, followed by Equity Global with just over half as much at €81.8bn, while Equity Europe fills out the top three with half as much again at €40.9bn.
The top five peer groups, of which four are equity products, accounted for 44.8% of the total AUM for the European ETF market at the end of April, while the top ten out of 173 pushes that consolidation to 58.1%.
Although relatively few peer groups comprised the majority of the market, even fewer promoters dominate the European ETF space, and iShares alone accounted for 47.2% (€367.2bn) of the overall AUM.
Xtrackers (€81.8bn) and Lyxor ETF (€60.3bn) trailed far behind, but still accounted for the second and third greatest AUM, while the top ten promoters of a total 54 in Europe are responsible for 93.4% of the total AUM.
Of 2,920 instruments, only 60 funds reported inflows of greater than €100m during April, the best-selling of which, iShares Core € Corp Bond UCITS ETF EUR (Dist), accounted for net inflows of €2bn, followed by iShares $ Corp Bond UCITS ETF US Dist (€1.6bn) and Xtrackers MSCI Europe UCITS ETF 1D (€0.8bn).
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Detlef Glow, Lipper head of EMEA research at Refinitiv, said: "After the markets bounced back from the trough caused by the global lockdown during the coronavirus pandemic, April was another positive month for the European ETF industry since ETF promoters enjoyed inflows.
"The combination of above average inflows and the positive performance of underlying markets led to an increase in assets under management from €719.1bn as of 31 March 2020, to €777.9bn at the end of April.
"The increase of €58.8bn for April was driven by the performance of the underlying markets (€50.1bn), while the net inflows contributed €8.7bn to the increase in assets."
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