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November 2024 was another month with strong inflows for the European ETF industry.Following the new all-time high monthly inflows in October (+€28.5 bn), the inflows into ETFs in Europe marked another all-time high (+€29.3 bn) in November. These inflows drove the estimated year-to-date net flows up to €225.0 bn, which would mark a new record for estimated full year inflows. That said, the strong inflows over the course of November brought my expectations for the estimated full year net flows up to a range between €230.0 bn and €240.0 bn.The flows in the European ETF industry over the course of November were dominated by equity ETFs (+€29.3 bn) while bond ETFs faced outflows (-€0.5 bn) for the month. Unsurprisingly, the inflows into equity ETFs were fueled by the outcome of the presidential election in the U.S. Equity U.S. enjoyed estimated net flows of €17.3 bn, which shattered the old all-time high for monthly inflows (€6.9 bn) which was achieved just a month ago. Equity U.S. Small & Mid Cap (+€4.2 bn) was the third best-selling classification overall followed by Equity Sector Financials (+€1.2 bn). These strong inflows might be caused by the so-called “Trump-trade,” as the president-elect announced parts of his program for economic growth and deregulation, especially in the financial services sector.
Graph 1: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, November 2024 (Euro Millions)
Source: LSEG LipperNevertheless, the strong inflows into ETFs over the course of the month seem to be driven by a general demand for ETFs since Equity Global, the second best-selling classification, enjoyed strong estimated net inflows (+€9.2 bn).Within the bond segment we found a story for U.S.-dollar bonds, which we have seen for EUR bonds in October, as European investors bought into Bond USD High Yield (+€0.4 bn) and sold Bond USD Corporates (-€0.7 bn). Speaking about last month, European ETF investors bought Bond EUR High Yield ((+€1.6 bn) in October but reduced their exposure to this classification over the course of November (-€0.3 bn).It also looks like European investors are reducing their exposure to emerging market bonds, as Bond Emerging Markets in Hard Currencies (-€1.4 bn), Bond Emerging Markets in Local Currencies (-€0.3 bn), and Bond Emerging Markets Other (-€0.04 bn) faced outflows. Conversely, Bond Emerging Markets Corporates (+€0.05 bn) enjoyed shy inflows.More generally speaking, the fund flows for October show from my point of view that European ETF investors are further in risk-on mode and were anticipating a clear result for the U.S. presidential election as well as further declining interest rates in the U.S. and the EU.More By This Author:
European ETF Flow Insights – November 2024
