|European ETF Market Lags US|
|June 22, 2012|
Investors withdrawing from ETFs tracking European indices were the dominant factor in the US$4.7 billion of outflows experienced by the European ETF industry in April.
Though fixed income and commodity funds saw net inflows, these were nowhere near enough to counteract the US$5.2 billion that went out of equity ETFs during the month, according to ETFGI.
Equity ETFs also saw net outflows in the US, but not to the same extent and the market stateside was ahead overall in April, with net inflows of US$4.2 billion.
The European market is lagging significantly behind its American counterpart this year so far. In April European ETF assets fell by 3.4%, while US assets fell by a much more modest 0.2%.
In the year to date, European assets have increased by 8.8%, while US assets have risen 14.4%.
Though the US market is much larger and more established than the European market, until recently its relative youth saw the European market growing at a much faster pace. However, in more recent times the sovereign credit crisis and regulatory concerns have led to a reversal of fortunes, a trend that was noted by Moody’s in its market overview in April.
European investors aren’t shunning all equity funds, however. While year to date there have been outflows of US$6.8 billion from ETFs tracking European equity indices, ETFs tracking emerging market equity indices have registered net inflows of US$2.9 billion.
The change in investor behaviour has also seen some interesting developments in the issuers attracting the most cash. After ending last year on a high, having benefited strongly from the change in investor sentiment driven by the relentless regulatory criticism of synthetic products, industry leader iShares experienced the largest net outflows in April, with US$4.3 billion.
Year to date, Source has gathered the most in net inflows, with US$1.5 billion, followed by UBS, with US$1.2 billion, and ETFlab Investment, with US$0.8 billion. db x-trackers, Commerzbank and EasyETF have had the biggest outflows.