Deutsche Bank Markets Research :Strong Inflows Continue, European and Japanese Equities Benefit

As of the end of March 2015, global ETP assets were at $2.8 trillion with European ETP assets at $493bn (€459bn). European ETPs continued the positive trend and registered a net inflow of +€7bn over the last month (+€30.2bn YTD)……..

Fixed Income and Equity ETFs were the major contributors to inflows receiving +€3.8bn and +€3.5bn respectively. Commodity ETPs experienced outflows of -€306mn after two consecutive months of inflows.

Preference for European equities over US equities continues into March

Investors trading European listed ETPs continued to show preference for European equities over US equities in March. This was evident following a total monthly inflow of +€5.8bn into developed Europe focused ETFs versus outflows of -€2.1bn from US focused ETFs.

Significant inflows into Japan focused ETFs

European listed ETFs tracking Japanese equities gathered +€1.1bn of cash flows in March, primarily into ETFs tracking MSCI Japan and JPX-Nikkei 400 indices. Among these, the largest recipient of inflows was Lyxor’s JPX-Nikkei 400 (JPX4 FP) collecting +€441mn.

Broad based EM ETFs saw redemptions

ETFs benchmarked to emerging markets indices reversed previous month’s inflows by recording outflows of -€582mn in March. These redemptions were primarily from MSCI EM benchmarked ETFs which saw aggregated outflows of -€472mn. YTD flows for EM ETFs have now reached to -€1.1bn which suggests that ETF investors may be shying away from emerging market exposure.

Fixed Income ETP flows dominated by investment grade Corporate Bonds

In March, fixed income ETF flow activity was similar to the previous month, recording +€3.8bn of inflows (+€4bn in Feb’15). Corporate bonds ETFs continued its dominance by attracting +€2.3bn over the last month followed by Sovereigns (+€1.5bn). Unlike the previous month, preference was for Investment Grade Corporate bonds over High Yield with +€1.5bn inflows.

Crude oil ETPs continue to accumulate assets while gold ETPs saw significant redemptions

Commodity ETP flows ended the month in negative territory recording outflows of -€306mn. This was primarily driven by redemptions from gold ETPs (-€688mn), partially offset by inflows into crude oil ETPs (+€256mn). Crude oil ETPs have now attracted +€1.2bn in YTD flows which may be driven by low oil prices.


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