European ETFs suffer “end-of-year stress”

ETFs ETPsExchange-traded products listed in Europe, including exchange-traded funds (ETFs), said farewell to 2018 with lower assets under management but still-positive inflows.

Although the sector had US$3.93 billion (€3.44 billion) of inflows during December, assets invested in European ETFs and similar products finished the month down 3.22% to stand at $768 billion, according to ETFGI.

Equity products saw net outflows of $1.51 billion in December, bringing net inflows for 2018 to $35.44 billion -considerably less than the $71.03 billion in net inflows equity products attracted in 2017. 

Fixed income had net inflows of $5.05 billion in December, bringing net inflows for 2018 to $19.67 billion, again less than the $25 billion in net inflows seen in 2017. 

Gold products saw the strongest sales among exchange-traded products, while iShares funds investing in MSCI World, MSCI emerging markets and 1-3 year Treasuries ranked as the top sellers, in that order, among ETFs.

Deborah Fuhr, managing partner of ETFGI, said: “The end of 2018 saw the trend in developed markets reverse, and although arguably predictable, the severity left many pundits scratching their heads.

“This end-of-year stress has widely been attributed to the disruption caused by trade disputes feeding into economic data, and the view policy makers are not going to be quite as accommodating as initially expected.”

The S&P 500 fell 9.03% during December, and was down 4.38% for the year.  

Despite this troubled end to 2018, it was the 51st consecutive month of net inflows for the industry, and for the year net flows were $56.72 billion.

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