Flows to Eurozone ETFs could pick up again, says BlackRock

Euro signFlows into exchange-traded funds (ETFs) investing in Eurozone equities eased off in November after a strong October as European investors looked for opportunities elsewhere, such as the US.

However, BlackRock says flows into the region could return on the back of strong earnings and quantitative easing (QE).

In BlackRock’s regular ETP Landscape report, Ursula Marchioni, a chief strategist at iShares, writes: “While Eurozone equities saw the lion’s share of developed markets flows this year, last month investors turned to opportunities in other markets rather than to the consensus home bias. We believe this could well change with earnings for the region continuing to deliver, and market sentiment continues to rely on the ECB [European Central Bank] easing stance.”

Broadly, flows into ETFs and similar products globally reached $302.4 billion (€277.7 billion) in the year-to-date at the end of November – approaching the highest ever figure, set last year, for full-year flows.

In November exchange-traded products gathered $28.2 billion, with US equity funds seeing their best month this year and accounting for most of the month’s investment, at $21.4 billion.

Broad developed markets equity funds attracted $6.4 billion and emerging markets equity funds shed $2.5 billion, led by China. Fixed income also saw net outflows of $129 million, a turnaround on a strong October.

Products in Europe accumulated $3.2 billion in net new flows and 2015 has been the best year on record for the European industry, with $73.2 billion of inflows so far.

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