Amundi reports that it was a record month for the European-domiciled UCITS ETF market, which attracted net new assets (NNA) of EUR38.5 billion in October.
This was a 33 per cent year-on-year increase on the EUR28.9 billion inflows in October 2024.
Although momentum for equities fell towards the end of last month, this asset class led the way with NNA of EUR24.5 billion, the firm writes, reporting that appetite for US equities was the key driver of equity interest, adding EUR6.4 billion.
Fixed income recorded a strong month with inflows of EUR14.6 billion, the firm writes, adding that investment grade corporate remained the favoured debt strategy, posting gains of EUR6.6 billion but interest in government debt also reignited with these indices gaining EUR4.3 billion.
Amundi writes that a positive earnings season as well as strong market performance boosted investor appetite for the equity asset class.
US strategies led the charge, gaining EUR6.4 billion last month. Investor allocation into US indices are non-discriminatory exposures, with a focus on broad large caps. In contrast, European equity flows tend to have more granularity as investors look to allocate into sectors, for example. This is a trend that has continued throughout the year. In October, European indices gathered inflows of EUR2.8 billion. It remains the equity sub-asset class that has accumulated the most NNA year-to-date.
Last month, world indices gained EUR5 billion while all-country indices, such as MSCI All Country World (ACWI), attracted inflows of EUR4.7 billion.
Recent trends in both thematic and sector strategies continued, Amundi says. Defence gained almost EUR1 billion and investors also added EUR593 million to robotics. Investors allocated EUR2.4 billion to IT strategies while industrials gained EUR1.2 billion.
Healthcare indices recorded inflows of EUR1 billion, reflecting market concerns about stretched US equity valuations and sentiment focused on more defensive plays.
Investors also added around EUR1 billion to smart beta income strategies, which was accompanied by outflows of EUR766m from minimum volatility strategies. This reflects the high cost of being against the market so investors are instead selecting defensive sectors for protection so they could continue to benefit from potential market upside, Amundi says.
ESG equity ETFs recovered with inflows of EUR6.1 billion. US ESG equities strategies added EUR2.4 billion and all-country gained EUR1.2 billion. Investors also added EUR965 million to ESG emerging market indices.
Of inflows into investment grade corporate debt strategies, the majority – EUR5.7 billion – was funnelled into euro-denominated debt.
Money market strategies accumulated EUR1.9 billion with mainly euro-denominated strategies the most popular. Emerging market debt also gained EUR1.7 billion on the back of a weaker dollar and reduced tariff concerns.
Government bonds gained EUR4.3 billion with investors adding EUR1.7 billion to US dollar denominated debt, EUR1.4 billion to multi-currency strategies and EUR1.3 billion into euro-denominated bonds. Investors favoured 10-year plus bonds adding EUR1 billion to these strategies while withdrawing EUR426 million from those with durations of five to seven years.
This trend of selecting specific maturities in both the corporate bond and sovereign debt markets marks a shift from investors who previously preferred all maturity strategies, Amundi writes, adding that in 2025 they have favoured short maturities amid concerns about the future direction of interest rates.
ESG fixed income strategies added EUR7 billion – a higher proportion of total in-flows than for equities. Investors heavily favoured ESG investment grade strategies, adding EUR5.9 billion. ESG government bond strategies added EUR1 billion.
newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFexpress.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.
