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August marked longest inflow stretch for European equity ETFs

Graph_up1European equity ETFs achieved 12 consecutive months of inflows in August.

Data from BlackRock showed that $1.1 billion (€0.92 billion) was invested in European equity ETFs listed in Europe, Middle East and Asia (Emea), leading to the “longest inflow run on record” for the category.

However, BlackRock noted that the August flows into European equity ETFs were down on the month before.

Lyxor, the Paris-based ETF provider, noted that August was traditionally a quiet month for flows and its own data for European ETFs, also released this morning, showed that developed and emerging equity flows were €1.2 billion in August, mostly going to the “strongest economies” – the US and Germany.

According to Blackrock’s data, the overall $4.9 billion gathered by Emea-listed ETPs in August represented a “significant slow down” on the July figure of $9.2 billion as “tensions escalated on the Korean peninsula and many European investors hit the beach”.

Fixed income was August’s winning asset class for Emea flows, raising $2.5 billion, while equities came in “close behind”, gathering $2.4 billion.

BlackRock noted that August was only the second month in the last eleven in which equity flows had been behind fixed income.

Broad developed market equities collected $7.6 billion in August against a backdrop of positive economic data, said BlackRock.

Fixed income flows were led by investment grade corporates, which captured $4.2 billion.

However, there appeared to be “fragmentation” within fixed income ETP flows, Blackrock noted. This year, euro investment grade and emerging market debt ETPs have attracted just over half of the $22.1 billion raised by fixed income ETPs in Emea and 67% in the three months prior to August.

But in August itself their contribution was down to 37% of the total Emea fixed income flows.

“The absolute flow values are also seemingly on a slight decline for both categories,” said Patrick Mattar, from BlackRock’s the iShares Emea capital markets team.

Globally, developed market equity products, aided by fixed income, propelled fund flows for ETPs to $47.4 billion in August, which meant that year-to-date flows hit a new record.

And ‘momentum’ appeared to be the main theme. ETFs following the “trend is your friend” investment factor raised $300 million in August, the largest monthly inflow ever seen by this category, according to BlackRock.

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