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Two standout patterns in ETF investing last month

ETF_blocksTwo of the most interesting observations from Lyxor data about Europe’s ETF flows in October were to do with UK equities and environmental, social and governance (ESG) products.

“October was another strong month for equity ETFs, but behind the headlines something unusual happened,” says Marlene Hassine Konqui, head of ETF research at Lyxor. “US equity flows were surprisingly muted (+€52 million), while UK equities for once got the lion’s share of the country flows (+€2.3 billion).”

She added: “After an already strong September (+€1.7 billion), this presents a remarkable pattern: this is simply the market’s best year-to-date asset gathering on our records, with +€4.4 billion cumulated inflows so far.”

Konqui said the most likely catalysts were developments in the Brexit saga, with investors responding “constructively” to the reduced prospects of a no-deal outcome.

October was also a record month for ESG ETFs, with inflows of €1.9 billion. This took the total for the year to €11.7 billion.

Konqui described the flow to ESG ETFs as “unprecedented”.

European ETFs continued to enjoy steady inflows in October and gathered €10.7 billion. Of this, €5.3billion went into equity, and €2.7 billion into fixed income.

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