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The ETF Market Reached €589 Billion in the First Half of the Year

Global indices recorded the bulk of flows in Europe with $40.5 billion (€34.3 billion) followed by the U.S. and North America with inflows of $20 billion(€17 billion) combined. At the individual country level, ETFs on Japan indices $4 billion (€3.4 billion), UK indices $3.3 billion (€2.8 billion), and China indices $1.65 billion (€1.4 billion) increased. In contrast, ETFs on French equities -$657 million (-€557 million).

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Global ETF inflows totaled $695 billion (€588.6 billion) in the first half of 2021. The U.S. market clearly dominated with inflows of $556.2 billion (€471.1 billion) (80%) followed by Europe with $10.6 billion (€90.3 billion) (15%) and Asia with $32.1 billion (€27.2 billion) (4.6%). More than three-quarters of the inflows (77%) or $528 billion (€447 billion) were attributable to equity ETFs. Bond ETFs recorded inflows of $159 billion (€134.6 billion) (23%).

In June, global ETF inflows totaled $10.5 billion (€8.9 billion). That is roughly in line with the May level. However, there were shifts among the regional ETF markets. While both U.S.- and European-registered ETFs saw inflows increase from the previous month (U.S.: $92 billion (€78 billion); Europe: $16.5 billion (€14 billion), Asian-registered ETFs saw outflows of $4.7 billion (€4 billion) in June.

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Inflows in Europe – first half of 2021

Equity ETFs registered in Europe saw inflows of $84.5 billion (€71.6 billion) in the first half of the year. Global indices recorded the bulk of flows in Europe with $40.5 billion (€34.3 billion) followed by the U.S. and North America with inflows of $20 billion(€17 billion) combined. As in previous months, there were further outflows from Asian and South American emerging markets (-$360 million (-€305 million) and -$272.2 million (-€231 million), respectively).

At the individual country level, ETFs on Japan indices $4 billion (€3.4 billion), UK indices $3.3 billion (€2.8 billion), and China indices $1.65 billion (€1.4 billion) increased. In contrast, ETFs on French equities -$657 million (-€557 million) and German equities -$584 million (-495 million) recorded outflows.

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In terms of sectors, ETFs on financials were the most sought-after $5.3 billion (€4.5 billion), which Amundi said could reflect hopes for a robust economic recovery following the flattening Corona threats. This confidence could also explain the good demand for value strategies of $10.7 billion (€9.1 billion). ESG and climate ETFs also remained in investors’ focus. They attracted $36 billion (€30.4 billion) and $4.5 billion (€3.8 billion) respectively in the first six months – also driven by new regulatory frameworks.

Bond ETFs registered in Europe saw inflows of $18.3 billion (€15.5 billion) in the first half of 2021. Investors preferred corporate bond ETFs $9.8 billion (€7.8 billion) over government bond ETFs $6.4 billion (€5.4 billion).

U.S. corporate bonds were the most popular, with the investment-grade segment seeing inflows of $3.54 billion (€3 billion) and the U.S. high-yield segment seeing inflows of $1.4 billion (€1.2 billion). Investors withdrew funds from the eurozone – $400 million (€339 million) from the high-yield segment and $392 million (€332 million) from the investment-grade segment.

In government bonds, ETFs on Chinese paper were most in-demand in H1: $5.8 billion (€4.9 billion). By contrast, there were outflows in ETFs on eurozone government bonds -$1.9 billion (-€1.6 billion) and global emerging market bonds -$1.42 billion (-(€1.2 billion). US and eurozone inflation-linked bonds also saw inflows of $1.9 billion (€1.6 billion) and $1.77 billion (€1.5 billion), respectively.

On the bond side, investors also switched from traditional to sustainability indices $13.7 billion (€11.6 billion). This represents around 75% of total inflows into bond ETFs in the first half of 2021.

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(Featured image by viarami via Pixabay)

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First published in investrends.ch, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Desmond O’Flynn believes in minimalism and the power of beer. As a young reporter for some of the largest national publications, he has lived in the world of finance and investing for nearly three decades. He has since included world politics and the global economy in his portfolio. He also writes about entrepreneurs and small businesses, as well as innovation in fintech, gambling, and cannabis industries.

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