European ETFs (exchange traded funds) raised $58.5 billion in the second quarter of 2024, an increase of 88% on the same quarter last year — taking net new assets (NNA) for the first half of the year up to $106.6 billion, an increase of 46% on the first half of 2023.
European ETF assets under management breached the $2 trillion barrier for the first time during the quarter.
That’s according to Invesco’s Q2 2024 European ETF Demand Monitor.
“The main themes seen in Q1 continued with equity products continuing to dominate, taking 76% of NNA over the quarter while flows into fixed income ETFs remained robust with a 28% market share, ahead of their 24% AUM share at the start of the year,” said Invesco.
“Commodity ETPs experienced further net outflows of $2.5 billion, mainly driven by sales of gold products.
“Assets under management breached the $2 trillion barrier for the first time during the quarter, driven by both strong inflows and rallying equity and commodity markets.
“Although the timing of rate cuts continues to be pushed back, central banks appear confident that the next move in rates will be lower with easing likely in most major developed market economies during the second half of the year.
“This is likely to be supportive for financial markets, even though growth is forecast to be sluggish, while geopolitical tensions remain elevated and political uncertainty has increased in recent months.
“Indeed, the need to be nimble to navigate events during the second half is likely to benefit ETFs which provide investors with the ability to adjust their asset allocation quickly and efficiently.”
European equity ETF assets under management (AUM) hit new all-time highs in Q2, ending the quarter at $1.45 trillion, driven by a combination of strong inflows and market performance. At $84.3 billion, NNA for the first half is 2.3 times stronger than seen in the first half of 2023.
Fixed income AUM also reached a new high during the quarter, ending Q2 at $447 billion with negative market performance slightly offsetting the $16.1 billion of inflows. Overall, the pace of net inflows into fixed income over the first half of 2024 has been slightly slower than last year.
Commodity products continued to suffer outflows, mainly due to sales of gold ETPs. However, strong performance mean that commodity AUM rose to end the quarter up 5.4% at $124.3 billion.
“While equity ETFs continue to lead NNA in absolute values, when looking at net inflows as a percentage of starting AUM, the pace of fixed income ETF inflows is ahead of that for equities,” said Invesco.