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European ETF AUM dips sharply despite strong inflows in 2022

With macro challenges forcing investors to ‘rewrite their playbook’


Pete Carvill

The European ETF industry’s AUM dipped sharply between 2021 and 2022, according to Refinitiv.

The firm wrote in its European ETF Industry Review: 2022 that AUM sank from €1,330.5bn at the end of December 2021 to €1,242.2bn by the same point a year later. This, it said, was due to the negative performance of the underlying markets. Overall, the market saw inflows of €80.2bn last year.

Inflows, wrote Detlef Glow, head of Lipper Emea Research at the firm, were mostly derived from one asset class.

“The inflows in the European ETF industry over the course of the year 2022 were driven by equity ETFs (+€51.1bn), followed by bond ETFs (+€30.8bn), money market ETFs (+€2.1 bn), mixed-assets ETFs (+€0.4bn), and ‘other’ ETFs (+€0.01bn).

“Meanwhile, alternative Ucits ETFs (-€0.6bn), and commodities ETFs (-€3.6bn) were the only asset types with estimated outflows for the year.”

He added: “In more detail, the European ETF industry enjoyed inflows for 10 months of the year, while two months posted estimated net outflows. January 2022 was the month with the highest inflows into ETFs in Europe (+€25.6bn), while September posted the highest outflows (-€3.8bn). Taking into consideration that the war between Russia and Ukraine started at the end of February 2022, it is somewhat surprising that European investors did not start to sell bond and equity ETFs in February and March, since these type of products are considered as risky assets.”

Glow said that 2022 had been a ‘remarkable’ year for global investors with supply-chain concerns post-Covid being overshadowed by Russia’s war against Ukraine. This, he said, had caused investors to ‘rewrite their playbook’ for the year.

He added: “The war in Ukraine led to increasing prices for energy and food, which fueled the already increasing inflation rates. As a result, central banks around the globe had to act even harder to fight inflation. Within this environment it was somewhat surprising that the European ETF industry enjoyed inflows over the course of 2022. That said, these inflows repeated a trend which we have witnessed over the course of other rough market periods.”