Europe ETFs Gain 3rd Highest Ever Inflows In August

European-listed ETFs have gained $11.45 billion last month, the third highest amount on record

Editor, Europe
Reviewed by: Rachael Revesz
Edited by: Rachael Revesz

The European exchange traded fund (ETF) industry soared in August, gathering $11.45 billion of net new inflows, proving that recent volatility did little to scare ETF investors from capital markets.

New research, published today by consultancy ETFGI, found that inflows last month were the third highest amount on record in Europe. Equities took in $7.8 billion, fixed income gathered $2.3 billion and commodities climbed by $406 million.

Deborah Fuhr, managing partner at ETFGI, speaking today at an industry event, said: “This is pretty amazing when you think about what happened in August.”

The VIX index spiked to 40 points on 24 August as investors grew worried about the freefall in Asian capital markets and China’s regulatory interventions on its currency.

Net new assets in the U.S. last month, however, were just over $2.4 billion. Equities had outflows of $6 billion, with inflows going to the fixed income segment.

“What we are seeing is investors in Europe are acting differently to investors in the U.S.,” Fuhr added.

Since 2009, investors have seen 20 corrections in the U.S., and Fuhr said each one was a buying opportunity.

“Clearly people are bombarded by [bad] news and feel a need to react,” she said.

Fuhr said U.S. investors have more home country bias and are trying to “read the tea leaves” when it comes to U.S. Federal Reserve policy – what are they going to do and when are they going to do it. European investors are more positive about the European Central Bank doing out quantitative easing.

“You can see a pattern that Europeans are pretty positive about putting money to work,” she said, referring to January 2015 where U.S. investors pulled out the market while Europeans piled in.

ETF assets on a global scale have gained $219.7 billion year to date, up 16 percent from the same point last year. This year total assets in ETFs are hovering around the $3 trillion mark and have beat the total assets claimed by hedge funds.

Rachael Revesz joined in August 2013 as staff writer. Previously an investment reporter at Citywire, she has a background in writing content for retail financial advisors and has covered a wide range of subjects in finance. Revesz studied journalism at PMA Media, which has since merged with the Press Association. She also holds a B.A. in modern languages from Durham University, as well as CF1 and CF2 financial planning certificates from the CII.