Amundi reports global ETFs buoyant in August
Amundi reports that interest in global ETFs remained buoyant in August with investments increasing by EUR50.0 billion. Investors allocated EUR22.7 billion to shares, as the appetite for riskier assets has continued to strengthen, Amundi says.
Investors allocated EUR22.9 billion to debt, while commodities saw global in-flows of EUR3.6 billion with investor interest in gold ETFs starting to decline. August was the first month since March that equity in-flows to European-registered ETFs outpaced investments to debt instruments, with this asset class seeing in-flows of EUR3.9 billion, Amundi says.
Allocations to this asset class also reflected investors taking cautious increases in risk with flows returning to emerging market government debt. Highlighting this, Chinese government strategies attracted EUR916 million while US mid-term government debt saw outflows of EUR439 million. Overall allocation to government debt was EUR2.2 billion.
The firm writes that while investors are not yet ready to allocate significant amounts to emerging market corporate debt, they are taking the first steps towards putting capital back into the region first hit by the Covid crisis by allocating to EM sovereigns.
“In contrast, interest in developed world corporate debt is starting to wane reflecting a normalisation of credit spreads and reduced returns in this asset class. In-flows into this asset class were EUR930 million – almost in line with the allocation to Chinese govies.”
Increased demand for riskier assets meant allocations to European-registered equity ETFs outpaced fixed income with in-flows of EUR4.1 billion. This month saw investors return to global equities resulting in the first increase in main index ETFs since the market slowdown in March. Investors allocated EUR2.5bn to this asset class.
“This renewed risk appetite was also reflected to some extent in sectoral flows, with outflows from the defensive sector of healthcare (-EUR127 million), and in-flows (+EUR195 million) to the cyclical sector of materials. However, real estate gained while financial services lost out during the month so the story is more of a sector by sector one.
“Almost all other equity strategies benefitted from the risk-on trend, with the exception of smart beta, which saw outflows of EUR626m. While overall interest in this sector declined, investors did allocate EUR143m to momentum strategies underscoring the increased interest in riskier strategies.”
Turning to commodities, this month saw the lustre come off gold ETFs after many months of exceptional in-flows and strong price performance – the value of gold increased by 34 per cent between mid-March and early August, Amundi says.
“This move away from safe havens and back towards riskier assets saw outflows of EUR800 million from exchange traded gold strategies. This also reflected investors taking profits with prices peaking at the start of August.”