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European ETFs deliver ‘positive’ May despite AUM dropping €13.2bn

But net inflows remain far below the rollowing 12-month average

A new report from Refinitv Lipper found that May was another positive month for the European ETF market.

According to author Detlof Glow, head of Emea research, this was driven by the estimated €2.5bn of net inflows recorded during the month and despite AUM eroding by €13.2bn.

Glow wrote: “These inflows occurred in a negative and volatile market environment in which investor sentiment was impacted by high inflation rates, increasing interest rates, geopolitical tensions, and disrupted delivery chains caused by the still ongoing Covid-19 pandemic in Europe and other parts of the world.”

He added: “The performance of the underlying markets led to decreasing assets under management, since the estimated net inflows (+€2.5bn) could not offset the impact from the declining markets (-€15.7bn).”

Structurally, equity funds held 71.3% of the assets, followed by bond funds (23.59%), commodities products (4.06%), alternative Ucits products, money market funds, mixed-assets funds, and ‘other’ funds.

According to the report, the European ETF industry enjoyed healthy estimated net inflows for May, which were far below the rolling 12-month average (€11.5bn).

The inflows for May were driven by equity ETFs (+€1.3bn), followed by money market ETFs (+€0.6bn), bond ETFs (+€0.5bn), and mixed-assets ETFs (+€40m). On the other side of the table, alternative Ucits ETFs (-€20,000), ‘other’ ETFs (+€1m), and commodities ETFs (+€30m) were facing outflows.

Wrote Glow: “This flow pattern drove the estimated overall net inflows to €2.5bn for the month. Given the general negative market environment, it was surprising that bond and equity ETFs enjoyed inflows for the month.”

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