DeAWM: Europe Monthly ETF- ETF Investors Positioning in EM Equities

European ETP Highlights :As of the end of April 2014, global ETP assets approached $2.36 trillion (€1.7 trillion) where European ETPs experienced +€6.4bn of cash inflows. Equity exposed ETFs benefitted most by gathering +€3.6bn, while fixed income products continued their steady rise from the start of the year by accumulating a further +€2.4bn….

Deutsche Bank

Commodity based ETFs listed in Europe saw modest inflows of +€0.3bn.

European ETFs with EM exposure attracted significant flows

Investors trading European ETFs focused their investments outside of Europe, particularly in global Emerging Markets. Our analysis suggests that +€1.2bn flowed into EM despite the on-going political turmoil in Russia and Ukraine. iShares MSCI Emerging Markets UCITS ETF (IEEM LN) commanded the top spot for the month for net inflows gathering +€342mn.

Investors channelling money into equity yield

The dividend theme was also a highlight for ETF investors in April as it gained +€450mn of cash inflow. Investors showed a preference for US and Global dividend indices as indicated by the top dividend ETFs attracting flows. The S&P US Dividend Aristocrats and STOXX Global Select Dividend 100 were popular benchmark choices with investors.

UK the preferred investment in Europe

The UK equity market was the main driver for the strong European equity market performance in April. The FTSE 100 was up over 3% and MSCI UK was up over 4% on the month. This was supported by flows into ETFs tracking the FTSE 100 and MSCI UK. UBS ETFs tracking MSCI UK experienced significant inflows where investors also chose to invest in currency hedged versions of the ETFs. This demonstrates investor caution on the strength of Sterling. Insidewe highlight the ETFs concerned.

Steady flows into Sovereigns, Gold ETPs in Europe countering trend in US

The flow into fixed income products have been steadily increasing since the start of 2014. April saw another stellar month for fixed income ETFs where Sovereign based ETFs received over +€1.4bn of inflows.

In spite of over -$1bn of outflows from US based ETPs tracking gold, investors trading European ETPs sought safety by pilling in over +€170mn (+$239mn) in gold products.


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