Partner Insight: Vanguard's European ETF flows summary

Highlights

European-domiciled ETFs saw total net inflows of $10 billion in September, down from the $11.1 billion in the previous month¹.
Equity products saw net inflows of $7.8 billion while fixed income strategies attracted just under $2 billion.
Commodity ETFs generated inflows of $253.9 million, while multi-asset products saw inflows of $24.6 million. Alternatives strategies attracted $12.7 million.

Total ETF market flows

Bond inflows softened in September

European ETF cumulative flows - cumulative 12 months by asset class ($ billion)

Source : ETFBook, as at 30 September 2023.

Equity ETFs

Core equity remains most popular equity ETF category

Equity flows by category: Month to date ($ million)

Source: ETFBook, as at 30 September 2023. The ‘segment' category includes equity exposures which target specific market capitalisation segments, such as small-cap, mid-cap and large-cap. The ‘market access' category includes difficult-to-access markets such as emerging markets. The ‘basket' category includes strategies that combine several stocks as the underlying exposure, such as FAANG stocks.

Core equity ETFs were again the top contributor in September, adding $5.9 billion to net inflows. Sustainable equity strategies were the second-most popular category, garnering $1.6 billion in net inflows. Meanwhile, difficult-to-access market strategies saw -$193 million of net outflows during the month.

Investors favour US equity exposures

Equity flows by geographic exposure: Month to date ($ million)

Source : ETFBook, as at 30 September 2023.

United States exposures ($4.4 billion) attracted the most inflows within equity ETFs, followed by World (which doesn't include emerging markets) ETFs, which saw $3.5 billion in net inflows. Japanese equity ETFs were the least popular category, seeing -$708.6 million in net outflows.

Fixed income ETFs

Ultra-short maturity bond ETFs still most popular

Fixed income flows by category: Month to date ($ million)

Source : ETFBook, as at 30 September 2023.

Ultra-short maturity bond ETFs² ($1.4 billion) remained the biggest contributors to net fixed income inflows, despite dropping off considerably from the previous month ($2.5 billion inflows). Government bond ETFs ($963.1 million) also saw strong inflows, while high yield bond products saw the largest outflows (-$478.4 million).

Eurozone bond exposures oust US as top region

Fixed income flows by geographic exposure: Month to date ($ million)

Source : ETFBook, as at 30 September 2023.

Eurozone bond exposures ousted the US as the top regional contributor across fixed income ETFs, with $1.8 billion of net inflows in September, followed by US bond ETFs with $1.1 billion. Meanwhile, emerging market bond ETFs continued to see the largest net outflows, with -$1.2 billion.

Vanguard UCITS ETFs

Vanguard range sees net inflows of $1.6 billion in September

Vanguard UCITS ETF net flows: Month to date ($ million)

Source : ETFBook, as at 30 September 2023.

The Vanguard UCITS ETF range captured net inflows of $1.6 billion, with the majority of Vanguard UCITS ETFs recording positive flows. Flows were split between Vanguard's equity UCITS ETF range ($1.2 bllion), fixed income UCITS ETF range ($457 million) and multi-asset UCITS ETF range ($13 million).

Our most-popular ETFs in September

FTSE All-World UCITS ETF - (USD) Accumulating (VWRP)
S&P 500 UCITS ETF - (USD) Accumulating (VUAG)
EUR Eurozone Government Bond UCITS ETF - (EUR) Accumulating (VETA)

Exchange-traded funds

Low-cost, uncomplicated portfolio building blocks

¹ Source: ETFBook, as at 30 September.

² Source: ETFBook, as at 30 September 2023. The ultra-short category includes ETFs that invest in fixed income instruments with very short-term maturities.

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