ETF flows “positive” during tough period

European investors in exchange-traded funds (ETFs) favoured fixed income and commodities – mainly gold – over recent months, flow data shows.

Fixed income ETFs raised €6.75 billion of net new money and commodities raised €3.3 billion of net inflows, according to Morningstar figures for the second quarter of the year.

Morningstar said ETF fund flows were “positive” during the quarter, given difficulties that investors faced, such as the UK Brexit vote.

Nearly 30% of new money went into smart beta ETFs, while equity ETFs saw a second consecutive quarter of outflows to the tune of €2.7 billion, though June saw net inflows of €1.2 billion.

The European ETF market netted nearly €8 billion of new money in the second quarter of 2016, a decline from the €11 billion of net inflows registered in the first quarter.

Assets under management at the end of the second quarter were €482.4 billion, a 4.2% increase from the end of the previous period.

Jose Garcia-Zarate, associate director of passive strategies research at Morningstar, said: “Given the general investment environment, we see these figures in a positive light. Investors had a tough time in the second quarter of 2016.”

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