In April the ETF funding globally amounted to €42.7 billiona figure in line with the previous month and lower than the average.
As in March, investors also have in April fixed income preferredwhich he recorded inflows of 22.1 billion euroWhile equities raised 15.5 billion.
Inflows into the US ETF market remained subdued at €31.7 billion, while inflows were €10.4 billion in Europe and slightly negative in Asia (APAC).
Overall, according to Amundi data, the most popular strategy was that of global stock indexes which this month attracted 8.1 billion euros worldwide. US high yield bonds were the second most popular strategy, raising €5.2bn; while the largest outflows, equal to 2.2 billion euros, were recorded by large value strategies.
Furthermore, market data indicates that, despite low levels of volatility, investors have no clear direction for their investments. The higher popularity of fixed income relative to the equity segment in both the US (€14.4 billion vs. €12.7 billion) and European (€6.4 billion vs. €3.9 billion) ETF markets euro) indicates a preference for less risky assets.
Flows in Europe
In April, the Equity ETFs domiciled in Europe recorded inflows of €3.9 billionwith world indices being the most popular strategy, raising €2.3bn.
The emerging market strategies they maintained their popularity in the first quarter, with inflows of €1.1 billion in April. Year-to-date, emerging market ETFs have attracted half of total equity allocations, notably reflecting the region’s lower valuations and lower correlation to developed market equities. Investors have also allocated €800 million to Japanese strategies this month.
In contrast to the past three months, the popularity of European equity strategies has waned, with investors divesting €800m from this asset class.
As in March, investors continued to favor technological shares (+300 million euros). ETFs exposed to US financial stocks were also favored by investors (+600 million euros). In line with global trends, investors divested €400 million from value ETFs.
European UCITS equity ETFs integrating ESG criteria raised €2.1 billion. Investors allocated €900m to global ESG indices, representing 40% of the month’s overall ESG equity allocations. In addition, €600 million has been invested in both emerging markets and Japan’s ESG strategies. Finally, outflows of €400 million were recorded in European ESG equities.
As regards fixed income, in April, the funding of fixed income ETFs domiciled in Europe amounted to 6.4 billion euros.
In line with the March trend, European investors favored government bonds with allocations of €3.3 billion. Investors favored US dollar-denominated debt (+€2.2 billion). This funding was roughly split between long and short maturities, highlighting a dichotomy in investor beliefs. Investors who invested in short-term maturities were aiming to limit duration due to concerns about interest rate risk, while those who invested in long-term maturities were likely concerned about the possibility of a recession in the United States.
But not only, investors have allocated 2.4 billion euros in investment grade corporate debt, of which €1.8 billion earmarked for euro-denominated debt. Unlike government debt, investors have not demonstrated a strong preference for maturity.
Finally, the ESG fixed income ETFs raised €900 millionwith investment grade corporate bond strategies and government bonds attracting €300m each.
Fundraising for ESG fixed income strategies was significantly lower than for equity ESG, possibly due to the strong popularity of government bonds, where it is more difficult to integrate ESG criteria.