ETP flows moving towards 2008 levels

UP arrowsInvestor interest in exchange-traded products (ETPs) took a "dramatic" upswing in the first half of this year, says Morningstar.

The European ETP market received €22.9 billion in net inflows in the six months to June 30, 2014 – more than double the total net inflows for the whole of 2013.

Total assets under management in ETPs at June 30 were just under €342 billion, up from €302 billion at year-end 2013.

€13 billion of new money was placed in equity ETPs and €10 billion in fixed income. Equity ETPs now amount to €233 billion (68% of the total ETP market); fixed income €69 billion (20% of total); and commodities €31 billion (9% of total). The remaining 3% of assets resides in what Morningstar terms as "alternative"- a category that includes all types of leverage/inverse products as well as currency instruments.

Jose Garcia-Zarate, senior ETF analyst at Morningstar, says: "Should this trend continue apace in the second half of 2014, the European ETP market would be firmly on course to register net inflows on a par with those seen in the 2008-2010 period..."

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