Vanguard European ETF market review: European-domiciled ETFs saw their twenty-second consecutive month of inflows, recording $29.4 billion of new fund assets in January, significantly ahead of the average monthly inflows seen in 2021(1).
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Vanguard European ETF market review January 2022
Highlights
Equity ETFs captured $24.9 billion of net cash flows in January, markedly higher than the $5.0 billion added in December.
Fixed income ETF flows slowed in January to $2.7 billion, from the $4.7 billion of inflows recorded in December.
European-domiciled ETF inflows accelerated in January ($29.4 billion) relative to the previous month ($10.8 billion). Market flows were dominated by equity strategies at $24.9 billion, while fixed income strategies took in $2.7 billion in new assets. Commodity ETFs saw $1.3 billion of inflows.
Within equities, core exposures led the inflows in January, taking in around $10.1 billion, more than reversing the $3.1 billion of outflows seen in December. Global ($4.3 billion), world ($2.8 billion) and United States ($1.5 billion) exposures were the most popular with investors. Sustainable and sector exposures were the next most popular strategies, attracting $5.3 billion and $4.3 billion of assets respectively. Within sustainable ETFs, United States exposures registered the majority of inflows ($1.8 billion), with Europe and world strategies adding $1.0 billion each. In sector exposures, the world, Europe and the United States exposures experienced the largest inflows, each bringing in between $1.2 billion and $1.3 billion in new assets. There were no equity ETF categories which experienced meaningful outflows in January.
In fixed income, corporate, government and aggregate bond ETFs were the largest contributors to the asset class’s total inflows of $2.7 billion, contributing $1.6 billion, $1.3 billion and $0.9 billion of flows respectively. Corporate bond ETF inflows were primarily driven by United States ($0.7 billion) and emerging market ($0.6 billion) exposures. Within government bonds, Chinese debt was the strongest contributor to the sector with $1.3 billion of inflows, after seeing outflows the previous month. Eurozone government debt ETFs also registered inflows, of $0.6 billion, while emerging market sovereign debt strategies saw outflows of $0.9 billion in January. Within the aggregate bond segment, global exposures saw the majority of the inflows, with $0.7 billion. Inflation-linked ETF exposures suffered net outflows of -$0.6 billion, with US inflation-linked exposures (-$0.8 billion) the largest detractors.
Commodity ETFs garnered $1.3 billion of assets in January, with broad exposures ($1.2 billion) the strongest contributors.
Vanguard UCITS ETFs
In January, the Vanguard UCITS ETF range captured net inflows of approximately $1.6 billion, primarily driven by inflows into the equity ($1.4 billion) range. In equity, the Vanguard S&P 500 UCITS ETF and the Vanguard FTSE All-World UCITS ETF registered the largest inflows over the month, with $499 million and $360 million respectively. The Vanguard FTSE 250 UCITS ETF was the only UCITS ETF in the equity range to suffer outflows, of -$17 million.
The Vanguard fixed income UCITS ETF range experienced inflows of around $150 million in January, mainly thanks to inflows into the Vanguard EUR Eurozone Government Bond UCITS ETF ($79 million) and the Vanguard Global Aggregate Bond UCITS ETF ($38 million). The two detractors over the month were the Vanguard U.S Treasury 0-1 Year Bond UCITS ETF (-$22 million) and the Vanguard USD Corporate Bond UCITS ETF (-$12 million).
The Vanguard LifeStrategy UCITS ETF range continued to see significant investor interest, attracting $44 million of inflows.
1 Source: Vanguard, ETFbook, as at 31 January 2022. Data extracted on 3 February 2022.
Source: ETFWorld.co.uk
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