Monthly European ETF Market Trends – March 2016 in brief

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European ETF Market flows reached a one-year record low in
February 2016. Outflows during this month amounted to EUR271M. Total
Assets under Management are down 5% vs. the end of 2015, reaching
EUR428.5bn, and including a negative market impact (-4.2%[[75% of MSCI ACWI NTR -6.7% and 25% of the JPM Global Aggregate +3.2% between 31/12/15 and 29/02/16 in EUR]]). Equity ETFs
were hit by the increasingly risky environment while fixed income govies
ETFs benefited from their safe haven status.

• Equity indices saw record high outflows at EUR2.4bn. All developed equity ETFs
  were impacted by these outflows. European region ETFs registered EUR1.1bn of outflows in
  February, the first negative month since April 2015. US and Asia Equity ETF flows were also
  negative at EUR 821M and EUR442M respectively. Emerging market equities on the other
  hand saw very limited outflows of EUR124M with broad Emerging Market ETFs gaining
  positive flows of EUR196M. This seems to indicate that investors are cautiously reentering
  this area as a floor may have been found on oil prices. Noticeably, Smart Beta ETFs
  gathered significant inflows of EUR907M, mainly on defensive strategies.

• Fixed income indices’ inflows rebounded at EUR1.9bn. Interestingly these fixed
  income flows mainly concerned developed country govies. Inflows on European Govies
  were significant at EUR871M, benefiting from anticipations of new quantitative easing
  action to be announced during the next ECB meeting in March. Investors looking for safe
  haven investments in a highly volatile environment also favored US and German govies with
  inflows respectively of EUR417M and EUR332M. Flows on corporate and high yield bond
  ETFs rebounded slightly with a total of EUR380M, mainly on US indices.

• Commodities flows continued to see positive inflows at EUR216M with inflows on Gold
  ETFs of EUR140M as investors searched for safe haven investments