Amundi ETF Trend Report - 2018 Overview

Tuesday 08 January 2019

Expertise, Video



2018 was divided into 2 distinct parts for the European ETF market: if the first quarter maintained last year’s momentum, with 22 bn € of net new assets, the next 3 quarters suffered a significant slowdown, with cumulative subscriptions of 21 bn €. In total, net flows amounted to 43 bn € for 2018, which is about half of the amount reached in 2017. In terms of asset classes, equities accounted for 2/3 of these flows.

On the equity side the United States came on top, capturing nearly half of the flows. Global equities also attracted investors, while Europe and Japan ended the year in negative territory, with outflows of about 2 bn € for each of these two regions.
At the end of the year, a rotation movement took place, with a reallocation of positions in developed markets towards emerging markets. In the end, EM ETFs benefited from 6 bn € of subscription over the year, of which 3 came in December.
Regarding Smart Beta, defensive factors have been favored by investors. Indeed, the more cautious trend observed in the markets over the past few months has supported the Minimum Volatility and Quality factors, which top the inflow ranking.
Finally, there’s an ever-increasing interest in SRI ETFs, which this year represented more than 10% of all equity inflows.
On the bond side, Government debt was the clear winner. And yet again the United States came on top, thanks to increasingly attractive yields driven by the Fed continuing rate hikes. However, all regions benefited from positive flows in 2018, as a total of nearly 14 bn € was allocated to this asset class.
Conversely, corporate debt suffered 2.5 bn € of outflows, due the climate of uncertainty that has settled on the markets and to credit spread movements that impacted both Europe and the US.
Finally we can also note a strong activity on commodities, but which resulted in a zero-sum game over the year with cumulative flows close to 0.