The assets under management in the European exchange-traded funds (ETF) industry increased by €1.1bn (£946m, $1.3bn) to €648.3bn at the end of February this year up from €647.2bn in January, according to a Thomson Reuters Lipper.
This was helped by net sales of ETFs of €10.5bn during the month, even though general market turbulence during this period led to a fall in the value of assets under management in ETFs of €9.4bn.
February also saw one Amundi ETF secure net inflows of €1.4bn making it – on paper at least – the ‘best-selling fund’ in the month ahead of dominant asset management heavyweight Blackrock, according to Thomson Reuters Lipper data.
The last few years has seen the use of ETFs skyrocket around the world – assets under management held globally in ETFs is now more than €5.7trn – as investors turn away from the high fees and inconsistent performance of active fund managers in the aftermath of the global financial crisis.
Buoyant global stock markets have added to the appeal of low-cost trackers that follow a broad index.
“Investors in Europe want transparency and the ability to trade in and out – maybe in the same day if they want to – which you can’t do with mutual funds.”
Flexibility and fees
Thomson Reuters Lipper’s head of EMEA research Detlef Glow said he expected rising month-on-month inflows into European ETFs to continue throughout the year.
“A lot of investors are changing from active managed funds over into ETFs. Investors in Europe want transparency and the ability to trade in and out – maybe in the same day if they want to – which you can’t do with mutual funds,” Glow said.
“In addition, investors have become more cost cautious and therefore they are looking for cheap investment products. European ETFs are cheap and might become cheaper in the near future.”
Many of leading ETFs offer management fees that are about one fifth of the typical 1.5% charged by active fund managers.
Amundi ETF beats Blackrock
The best-selling ETF for February, Amundi Index MSCI EMU – UCITS ETF DR (C), accounted for 12.8% of the overall inflows, according to Thomson Reuters Lipper data.
The surge in flows into the European large and mid cap-focused fund during February is likely to be a one-off. The spike was because Amundi restructured its funds and moved money from one ETF to another, the company said. There was no resultant increase in assets under management of the fund.
Overall, Blackrock, the world’s largest asset manager, remains dominant. iShares, the ETF arm of BlackRock, attracted net inflows of €3.7bn ahead of Amundi ETF (with inflows of €3.5bn) and Vanguard (inflows of €1.3bn).
The highest assets under management at the end of February were held by funds classified as Equity US (€102.2bn), followed by Equity Eurozone (€55.7bn), Equity Global (€51.6bn), and Equity Europe (€38.1bn) as well as Equity Emerging Markets Global (€34.3bn).
