Vanguard: July European ETF Market Report

The ETF market saw $1.3 billion in outflows for the month, following June’s $118 million in outflows.

  • Europe-based ETFs saw outflows for the second straight month in July. The ETF market saw $1.3 billion in outflows for the month, following June’s $118 million in outflows.
  • Commodity ETFs were the top detractors from net inflows, with outflows of $2.9 billion, while equity ETFs suffered outflows of $2.7 billion, trailing admissions recorded in the previous month (2.6 – 2.6 billion). billion US dollars) more than compensated.
  • Bond ETF inflows turned positive with $4.3 billion inflows, reversing $2.3 billion of outflows recorded in June.

Inflows into Europe-domiciled ETFs continued to be negative in July as the market saw outflows for the second straight month, although risky asset prices rose during the month. The ETF market recorded an outflow of -$1.3 billion in July after suffering an outflow of -$118 million in the previous month. While bond ETFs saw positive net inflows ($4.3bn), these were more than offset by negative net inflows in commodities and equities (-$2.9bn and -$2.7bn, respectively).

Within equities, core ETF strategies saw the largest outflows, losing $6.3 billion in assets, with geographic exposures in the US (-$2.5 billion), Eurozone (-$1.4 billion) -$) and Europe (-$1.3 billion) led the negative outflows. These outflows were partially offset by positive inflows into core global exposures ($247 million). Smart beta ETFs (-$887m) also saw outflows in July, mostly from European, world and global exposures, as well as cap segments (-$731m) and sector strategies (-$238m). These outflows from the asset class were partially offset by inflows into sustainable strategies, which added $4.7 billion in assets. Of that amount, exposure to the US ($2.5bn) and emerging markets ($1.1bn) accounted for the majority of the inflows. Exposure to thematic ETFs also saw inflows of $506 million in July.

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

Commodity ETFs suffered $2.9 billion in withdrawals in July after shedding $629 million in assets the previous month. All commodity ETF subcategories were down for the month, with broad allocations (-$2.0 billion) and non-farm (-$612 million) and non-farm (-$270 million) vehicles all seeing outflows.

Vanguard UCITS ETFs

In July, the Vanguard series of UCITS ETFs saw net inflows of around $449 million, after positive inflows of around $1.3 billion in the previous month. Vanguard’s range of fixed income UCITS ETFs ($334 million) led the flows, followed by equities ($99 million) and multi-asset products ($16 million). In stocks, 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) saw the top inflows. The Vanguard FTSE 250 UCITS ETF recorded outflows of -$106 million, which was about the same as the previous month.

The range of fixed income Vanguard UCITS ETFs saw $334 million in inflows in July after registering $117 million in inflows in June. The inflows are primarily due to inflows into Vanguard USD Treasury Bond UCITS ETF ($210 million) and 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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