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Amundi reports ETF flow slowdown over first quarter


Amundi’s end March ETFflow report finds that although the global ETF market began 2018 with a roar, gathering more than EUR100 billion euros over the first quarter, in March flows were restrained, barely clearing EUR11 billion.

This slowdown was evident both in the bond market (EUR20 billion for the quarter among which five in March) and in equities (almost EUR80 billion for the quarter and five  in March).
 
The Asian ETF market proved to be the most resilient over the month (+EUR12.5 billion euros); meanwhile the US market suffered from withdrawals (-EUR2.2 billion). The European market registered limited flows at EUR1 billion euros overall (EUR1.2 billion into equities and EUR165 million out of bonds).
 
In the European ETF market, economic uncertainties led investors to rein in their investments in equities, asset class that gathered EUR1.2 billion euros in March, compared with EUR17 billion over the course of the quarter. Given this context, arbitrages were undertaken at the expense of European equities (-EUR1.9 billion euros in the Eurozone). Conversely, European investors continued to strengthen their positions in North America (+EUR1.6 billion) and emerging markets (+EUR1.3 billion), of which 124 million euros went to China, which leads the country exposures ranking.
 
In sectorial terms, March saw withdrawals from the financial sector (-EUR321 million euros) and from energy (-EUR208 million). Looking to thematic approaches, SRI continued to attract investors (+EUR117 million). Smart Beta and Factor strategies also continue to have the wind in their sails: inflows were primarily allocated to small caps (+EUR419 million) followed by multi-factor ETFs (+EUR360 million).
 
As regards fixed income, ETF flows in the European market shifted from corporate bonds (-EUR1.3 billion euros) into government debt (+EUR1.4 billion). Combining segments, this balanced out over the month at -EUR165 million euros. Within sovereign bonds, flows were divided between US securities (more than EUR1 billion euros across medium- and short-term exposures) and Eurozone securities to almost EUR600 million. Similarly, withdrawals from corporate bonds affected both Eurozone (-EUR776 million euros) and US securities (-EUR492 million). However, Amundi writes, over the quarter, Floating Rate Notes proved their interest, gathering over a billion euros.

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