Vaccine optimism boosts global ETF inflows, says Amundi

Vaccine

Reporting on global ETF flows in November, Amundi notes that positive vaccine news and the resultant optimism about the end of the Covid-19 crisis boosted global ETF in-flows to EUR122.5 billion in November − almost three times higher than in October at EUR42.7 billion.

The firm writes that investor confidence saw global equity allocations rising to EUR105.4 billion – a more than six-fold increase on the previous month, which recorded in-flows of EUR17.4 billion. Fixed income was EUR22.3 billion compared with EUR25.4 billion in October.

In terms of bonds, Amundi writes that in-flows into European-registered fixed income were less than a tenth of the assets allocated to equities at EUR1.5 billion. “This reflects the recent tightening of corporate bond spreads as well as investors not want to allocate more to this asset class.

“Corporate debt saw small outflows of EUR207 million and the same would have been true for government debt, had we not seen strong flows into the emerging markets. Investors’ confidence in Asia’s ability to bounce back from the Covid crisis saw emerging market and China government debt gaining EUR1.2 billion and EUR1.1 billion respectively, resulting in net flows of EUR2.1 billion in govies overall.”

In-flows into European-registered equity ETFs matched the more than six-fold global increase, with EUR16.3 billion flooding into these assets compared with EUR2.6 billion last month, Amundi writes. 

Global equities were the most popular allocation attracting EUR7.7 billion, according to the firm.  “Unlike earlier months where investors had favoured sectors and themes as well as ESG funds over smart beta and main indices, investors allocated to every equity strategy and across all regions. 

“Regional ETFs gained EUR14.6 billion while investors allocated EUR4.4 billion to sector and themes as well as EUR4.1 billion to smart beta strategies. ESG continued to prove popular, with in-flows of a further EUR6.4 billion. 

“The favoured strategies reflected investors’ confidence about the economic outlook. Financials and consumer discretionary were two of the most positive sectors attracting assets of EUR1.18 billion and EUR498 million respectively. Value saw in-flows of EUR2.3 billion.” 

This was the first month Amundi reported climate ETFs as an individual product as a result of The European Commission publishing the delegated act of climate-related benchmarks making this an officially recognised index series. Amundi reports that flows into climate products were EUR1.2 billion in November. 

“Investors are now rotating their equity allocations out of more traditional products into a core ESG allocation as well as a satellite climate ETF,” the firm writes.

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Beverly Chandler
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