Monthly European ETF Market Trends – August 2016 in brief

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European ETF Market flows slowed in August 2016. NET NEW
ASSETS (NNA) during this month amounted to EUR4.7bn, still 21%
above the one-year monthly average level. Total Assets under Management
are up 7% vs. the end of 2015, reaching EUR481bn, including a slight rise in
the market (+3.9%*). Emerging Market and investment grade corporate bond
ETFs gathered most in this environment of heightened uncertainty.

• Equity ETF inflows were significant at EUR2.1bn, continuing the trend of the last two
  months. On developed markets, flows were limited at EUR339M. Positive news in the US economic
  data helped sustain strong inflows of EUR1.2bn. However, in Europe the less positive economic data
  prompted outflows of EUR1.1bn from European ETFs. Emerging Market equity ETFs continued their
  rebound with inflows of EUR1.5bn. Flows were focused on broad index exposures, which would
  suggest that investors were taking a tactical position ahead of the FED’s decision on rates. Smart
  Beta ETF flows lost momentum, gaining just EUR435M in new assets after hitting a one-year record
  high in July. This month, Smart Beta investors favoured dividend and factor allocation products over
  minimum variance ETFs in their search for yield and alternative sources of return.

• Fixed income ETF inflows almost halved in August to EUR2.7bn compared to July,
  close to their one-year monthly average. On developed countries, flows were mainly focused
  towards investment grade corporate bond ETFs, which saw EUR1.4bn of new assets following
  sustained ECB action. Emerging Market Debt continued to see some inflows of EUR833M although
  at a slower pace than the one-year record high reached in July of EUR2bn, which was fuelled by
  the very low/zero interest rate environment and investors’ hunt for yield. The rebound in High yield
  Bond ETFs of July was short lived with EUR62M of outflows in August. Interestingly, flows on
  inflation-linked ETFs reached a one-year record high with inflows of EUR546M. Flows here were
  mainly on US exposures as economic growth seems to accelerate.

• Commodity ETF flows halted with EUR76M of outflows, which compares to the oneyear record high of EUR1.1bn reached in July.