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European ETFs raised $58.5 billion in the second quarter, an increase of 88% compared to the same quarter last year, and taking NNA for the first half to $106.6 billion, an increase of 46% compared to the first half of 2023.
The main themes seen in Q1 continued with equity products continuing to dominate, taking 76% of NNA over the quarter while flows into fixed income ETFs remained robust with a 28% market share, ahead of their 24% AUM share at the start of the year. Commodity ETPs experienced further net outflows of $2.5 billion, mainly driven by sales of gold products.
Assets under management breached the $2 trillion barrier for the first time during the quarter, driven by both strong inflows and rallying equity and commodity markets.
Although the timing of rate cuts continues to be pushed back, central banks appear confident that the next move in rates will be lower with easing likely in most major developed market economies during the second half of the year. This is likely to be supportive for financial markets, even though growth is forecast to be sluggish, while geopolitical tensions remain elevated and political uncertainty has increased in recent months. Indeed, the need to be nimble to navigate events during the second half is likely to benefit ETFs which provide investors with the ability to adjust their asset allocation quickly and efficiently.
Asset Class |
2023 Y/E AUM |
AUM |
Q2 NNA ($m) |
YTD NNA |
YTD % Market Moves |
---|---|---|---|---|---|
Total |
1,811,419 |
2,038,807 |
58,472 |
106,608 |
6.7% |
Equity |
1,251,555 |
1,452,657 |
44,681 |
84,257 |
9.3% |
Fixed Income |
432,642 |
446,989 |
16,129 |
28,240 |
-3.2% |
Commodity |
114,785 |
124,342 |
-2,453 |
-4,807 |
12.5% |
Source: Invesco, Bloomberg, as at 28 Jun 2024. All figures in USD.
While equity ETFs continue to lead NNA in absolute values, when looking at net inflows as a percentage of starting AUM, the pace of fixed income ETF inflows is ahead of that for equities.
|
AUM ($m) | % of Current AUM |
Q2 NNA ($m) |
% of Q2 NNA |
YTD NNA ($m) |
% of YTD NNA |
---|---|---|---|---|---|---|
Non-ESG |
1,636,980 |
80.3% |
52,525 |
89.8% |
91,932 |
86.2% |
ESG |
401,826 |
19.7% |
5,947 |
10.2% |
14,677 |
13.8% |
Invesco, Bloomberg, as at 28 Jun 2024. All figures in USD.
With NNA of $106.6 billion in the first half of the year, net inflows into EMEA ETFs were up by 46% relative to the first half of 2023, and only just behind the $112.0 billion seen at the halfway point in 2021, which turned out to be the strongest year on record for EMEA ETF inflows with a total of $192.9 billion NNA.
Although the timing of rate cuts was pushed back earlier in the year, central banks have continued to signal that the next move will be lower once they are comfortable that inflation is under control. Indeed, towards the end of the quarter, the ECB cut rates ahead of both the Federal Reserve and Bank of England, although they signalled that further easing would be gradual. Although bond market returns remained subdued over the quarter, the outlook for a combination of steady growth and easier monetary policy helped to spur on equity markets with several key US equity indices hitting new all-time highs during the quarter. While the macroeconomic backdrop remains supportive for financial markets generally and should continue to lead to strong demand for ETFs in the second half of the year, political and geopolitical risks remain. Both the war in Ukraine and the Israel-Hamas conflict are ongoing with the latter having the potential to lead to further instability in the Middle East. Meanwhile, rather than providing a more stable outlook, the snap election in France appears likely to lead to increased uncertainty in coming months while the focus for the second half will be the US presidential election in November, particularly following increasing concerns about whether Biden will be the democrat candidate.
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Global equity exposure without the concentration risk
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Monthly gold update
The gold price rose 2.3% in August, breaking through US$2,500 an ounce as the market prepares for the first Fed interest rate cut. Discover insights into the key macro events and what we think you should be keeping your eyes on in the near term.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Views and opinions are based on current market conditions and are subject to change. All data is provided as at 30 June 2024, sourced from Invesco unless otherwise stated.
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