Flows into European-domiciled ETFs were positive in May despite total net monthly inflows falling by around 46% to $8.2 billion1. Fixed income ($5.5 billion) and equity ($2.9 billion) products attracted the majority of net new assets, while flows into alternatives ETFs were broadly flat ($7 million) and commodity ETFs saw net outflows of -$283 million.
Within equities, sustainable equity ETFs were the largest contributor in May, generating $2.9 billion in net inflows. The bulk of inflows in this category were spread across world ($898 million), United States ($586 million) and emerging market ($477 million) products, while France (-$167 million) and China (-$52 million) ETFs accounted for the largest outflows. Core exposures were the second-most popular equity ETF category with net inflows of $1.1 billion, which were primarily driven by new investments into world ($1.3 billion), and emerging market ($409 million) exposures, while Switzerland (-$890 million) and Germany (-$436 million) products detracted. ‘Market access'2 equity ETFs also saw investor demand in May, recording $315 million of net inflows, with Brazil ($202 million) and China ($91 million) products the largest contributors to flows. Equity sector strategies saw -$631 million of net outflows in May, driven mainly by net outflows from Europe exposures (-$613 million). The equity segment category experienced net outflows of -$409 million, with net outflows from United States (-$195 million) and Germany (-$127 million) products suffering the largest outflows.
In fixed income, government ($2.4 billion), corporate ($1.4 billion) and ultra-short maturity ($1.2 billion) ETFs contributed the most to net fixed income inflows of $5.5 billion, while floating-rate (-$449 million) and inflation-linked (-$103 million) bond exposures continued to detract from total flows. Within government bond ETFs, eurozone ($1.2 billion) and United States ($1.0 billion) exposures led the inflows. Eurozone and United States exposures were the main drivers of corporate inflows as well, with $1.3 billion and $505 million of net new assets raised, respectively. Within the ultra-short maturity bond ETF category, eurozone products ($733 million) contributed the most to net inflows, while in the floating-rate category, eurozone products (-$266 million) led net outflows which totalled -$449 million.
Commodity ETFs saw net outflows of -$283 million, led by outflows from precious metals ($-136 million) and ex-agriculture (-$86 million) exposures.
Vanguard UCITS ETFs
In May, the Vanguard UCITS ETF range captured net inflows of $1.1 billion, with the majority of Vanguard UCITS ETFs recording positive flows. Flows were split between Vanguard's fixed income UCITS ETF range ($644 million) and equity UCITS ETF range ($440 million).
In equities, inflows were led by the Vanguard FTSE All-World UCITS ETF ($200 million) followed by the Vanguard FTSE Japan UCITS ETF ($92 million).
In fixed income, the primary drivers of inflows were the Vanguard U.S. Treasury 0-1 years UCITS ETF ($288 million), followed by the Vanguard EUR Eurozone Government Bond UCITS ETF ($82 million). In the ESG category, our ETF products recorded inflows for $38 million over the month, primarily driven by Vanguard ESG Global Corporate Bond UCITS ETF ($18 million).
This post is funded by Vanguard
1 Source: ETFbook, as at 31 May 2023.
2 Source: ETFbook, as at 31 May 2023. The ‘market access' category includes difficult-to-access markets such as emerging markets.
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Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.
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