October was the best month in the last five years for UCITS ETFs with a total inflow of €28.9 billion.
In October, global ETF inflows amounted to 150.7 billion euros, including 102.8 billion euros allocated to stocks and 36.7 billion euros to bonds.
This preference for equities was seen across geographies, with the asset class collecting €78 billion in the US, €21.8 billion in Europe and the Middle East and €3 billion in the Asia-Pacific region.
In North America, Large blend strategies (US indices based in the United States) collected 39.8 billion euros while in Europe subscriptions in the same product category amounted to 8.8 billion euros. Investors also allocated 8.8 billion euros in Chinese stocks, reacting positively to the government’s recovery plan.
Outflows reached 1.4 billion euros for short-term government bond and European corporate bond strategies.
October was the best month in the last five years for UCITS ETFs with a total inflow of €28.9 billion.
European flows – Summary of the current month
Actions
Collections in UCITS equity ETFs reached 22.7 billion euros in October. ETFs offering exposure to American stocks were largely favored with a collection of 11.7 billion euros. ETFs exposed to international stocks attracted 5.6 billion euros and so-called “All Country” strategies (equivalent to the MSCI ACWI) recorded subscriptions of 2.3 billion euros. Investors allocated 2 billion euros to emerging markets.
The appetite for risk is there: investors allocated 0.5 billion euros to the technology sector and withdrew 0.2 billion euros from health stocks, a defensive sector.
But concerns about the concentration of risk in the main indices pushed investors to allocate 1.5 billion euros to the equally weighted indices.
UCITS ESG equity ETFs collected €5.3 billion this month, almost a quarter of total equity allocations. American stocks were the main beneficiary with 2.9 billion euros in assets.
UCITS international ESG equity ETF subscriptions amounted to €0.8 billion while their emerging markets equivalents attracted €0.7 billion. Among the UCITS ESG equity ETFs, so-called low “Tracking Error” solutions were favored.
Obligations
UCITS bond ETFs collected 6.2 billion euros during the month of October. Sovereign bonds and “High Yield” corporate bonds were favored with respective collections of 3.3 billion euros and 1.9 billion euros.
Euro-denominated government bonds collected 2.7 billion euros last month, spread across a wide range of indices and duration. Indeed, investors both favored ETFs of all maturities (0.9 billion euros) but also allocated 0.8 billion euros to short and long-term bonds. This tends to reflect mixed investor sentiment.
Investors also allocated €0.7 billion to sterling-denominated bonds, where collection from ETFs of all maturities amounted to €0.4 billion while that from short-term bonds increased. amounted to 0.2 billion euros.
Reflecting a similar trend globally, euro-denominated corporate bonds lost €0.8 billion.
UCITS ESG bond ETFs captured 2.3 billion euros in flows. The collection concerned “Investment Grade” corporate bonds (0.9 billion euros), sovereign bonds (0.9 billion euros) and “High Yield” corporate bonds ( 0.5 billion euros).
