The latest news on ETFs reveals that investors are continuing to pour money into European equity exchange traded funds, despite recent political volatility in the region. According to BlackRock data, US-based investors invested a net $1.3 billion into European equity ETFs in June, the highest amount since February 2023. European investors also contributed to this trend, buying a net $910 million in ETFs.
Karim Chedid, head of investment strategy for iShares in the Emea region at BlackRock, noted that despite the political uncertainty surrounding the UK and France elections, investors remained bullish on European equities. He pointed to improving earnings and macroeconomic data in Europe as reasons for optimism.
In the UK, demand for London-focused equity ETFs reached a four-year high, with net inflows of $1.9 billion year-to-date. Additionally, sentiment towards UK government bonds has improved, with anticipation of rate cuts by the Bank of England in the third quarter driving inflows into UK gilts.
Overall, global ETF flows hit $128.1 billion in June, with equity funds accounting for $90 billion of this total. US-listed growth ETFs saw record inflows, with growth stocks outperforming value stocks by a wide margin.
In the fixed income space, US bond ETFs remained popular, but European and emerging market bonds also saw solid demand. Gold ETFs experienced a second consecutive month of inflows, driven by investors in the Emea region.
iShares, the global market leader in ETFs, had its highest monthly flows ever in June, surpassing its previous peak in November 2023. Vanguard also saw strong inflows, while State Street Global Advisors experienced outflows, partially attributed to the higher expense ratio of its flagship product, The SPDR S&P 500 ETF Trust.
Overall, the ETF market continues to see strong investor interest, with a diverse range of assets attracting inflows. The trend towards European equities, growth stocks, and gold ETFs highlights investors’ appetite for a variety of investment opportunities in the current market environment.
