Emerging markets beat Europe ETF flows

Mixed chartGlobal flows to exchange-traded funds (ETFs) investing in Europe slowed in May while money going into emerging markets increased.

Pan-European ETFs saw their lowest flows for six months, at $1.6 billion (€1.4 billion), and emerging markets saw their second consecutive monthly flow of $2.7 billion.

BlackRock, which produces monthly exchange-traded product (ETP) figures, also finds that money targeting fixed income has leveled off but remained ahead of 2014’s record-breaking pace.

Ursula Marchioni, head of ETP research at BlackRock says 2015 has been so far dominated by two trends: outflows from US equity exposures and inflows into most of the other developed equity markets.

ETPs giving exposure to Europe, Australasia and developed markets in the Far East have seen cumulated inflows of $35.8 billion year to date - $4.2bn of which in May alone. Within this trend, Japanese equity ETFs have been particularly popular, as part of a stock market surge that’s pushed the Nikkei 225 to its highest level since 2002.

“Looking at the May monthly flows, our ETP data suggests that investors’ attraction for European equities might start to cool. Pan European equity funds continued to see inflows, but at a slower pace than over the past six months,” says Marchioni.

“The majority of inflows came late in the month, following news that the ECB [European Central Bank] could conduct its bond purchases earlier than anticipated.”

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