Investor optimism pushed global ETF inflows up in February, says Amundi
Amundi has published its overview of February’s global ETF flows, revealing that investor optimism improved over the month, causing global ETF in-flows to rise by EUR122.2 billion.
The firm writes that equity in-flows doubled this month to EUR101.5 billion from EUR50.7 billion in January, while fixed income remained roughly at the same level of EUR19.2 billion compared with EUR20.7 billion last month.
North America saw the highest number of equity in-flows this month at EUR45.1 billion, according to Amundi, with sectors, themes and smart beta strategies the second largest gainer at EUR34.6 billion.
Fixed income in-flows were balanced across aggregates, corporate and government bonds − receiving EUR8.4 billion, EUR3.4 billion and EUR2.4 billion respectively.
In terms of bonds, Amundi writes that in-flows into fixed income were around half the levels seen in equities at EUR5.4 billion but this was more than three-times higher than the flows in January of EUR1.7 billion. Corporate bonds accounted for a significant proportion of those in-flows with net in-flows of EUR4.7 billion.
“This was driven by a significant allocation of more than EUR4.6 billion to US corporate ESG bond strategies, which looks like it came from one investor,” the firm writes. “Eurozone corporate bonds saw in-flows of EUR494 million while there were outflows from High Yield Eurozone of EUR372 million.”
Chinese government bonds continued to prove popular gaining in-flows of EUR1.1 billion. There were also significant allocations to inflation-linked products with US, Eurozone and World strategies gaining EUR521 million, EUR363 million and EUR126 million respectively.
The firm writes that this reflects renewed investor concern about consumer prices increasing during the post-Covid economic rebound now the US Senate has passed a stimulus package worth USD1.9 trillion.
Investor exuberance for equities in February was more muted for European-registered ETFs than the enthusiasm witnessed for global products, Amundi writes. In-flows were just below last month’s level at EUR10.9 billion compared with EUR12.9 billion in January.
Product trends also differed to those at global levels with sectors, themes and smart beta attracting EUR6.8 billion and world indices gaining EUR6.3 billion. The UK remained the top performing country attracting in-flows of EUR638 million, according to Amundi.
Sectors and themes gained EUR5.3 billion. Financials was the most popular attracting in-flows of EUR1.1 billion indicating investors feel optimistic about a post-pandemic economic bounce, the firm says.
Trends in smart beta strategies provided more evidence of positive investor sentiment. These strategies continued their revival with Value and Size strategies gaining EUR558 million and EUR464 million – both of which tend to perform well when economies grow strongly. More defensive products – such as Minimum Volatility and Quality experienced out-flows of EUR153 million and EUR92 million.
Amundi writes that ESG continued to perform well with in-flows of EUR6 billion with World and North America indices the most popular strategies, each receiving assets of more than EUR2 billion.