-In 2021, a small number of records in the European ETF segment were cleared, according to data from the ETF management Quantalys Observatory, created in collaboration with asset management company BNP Parisas Asset Management.
Thus, assets managed by 1,620 ETFs identified in Europe reached € 1.333 trillion by the end of 2021, an increase of 32% compared to the end of 2020, which was already at an unprecedented level. Considering all the assets under the control of the Ucits Fund Universe in Europe in 2021, the share represented by ETFs increased from 12% in the previous year to 14%.
“Europe accounts for 20% of the world’s ETF market for products and 13% of the world’s ETF assets. The market is still driven by North America,” said Quantalys, a data and technology solution provider. Director Jean-François Bay said. ETFGI showed at the beginning of the year that global ETF assets were $ 10.27 billion at the end of 2021.
ETFs also recorded a record net inflow of € 162 billion in Europe, breaking the record of € 117 billion inflows recorded in 2020. Last year’s investment in Europe came from ETFs.
Bond ETF Rush for the First Quarter of 2022
Specifically, in 2021, European investors will see € 117 billion in equity ETFs, € 40 billion in fixed income ETFs, € 1 billion in mixed and monetary ETFs, and € 2 billion in ETFs related to other classes of assets. I have invested the above.
“2021 was a year of strong technological recovery with the end of the Covid-19 crisis and the suspension of liquidity in the market. The movement of ETF collections is becoming more and more important regardless of market conditions. “I’m doing it,” continues Jean-François Bay. Bertrand Alfandari, Head of Development for BNPPAM’s ETF and Index Fund Business, said the strong year of equity in 2021 will be 75% or more of ETF inflows and market effects in Europe (estimated at € 159 billion in 2021). He added that it worked in his favor. The percentage of ETFs refers to the stock index.
Meanwhile, in the first quarter of 2022, bond ETFs were popular with European investors due to geopolitical conditions (Russia’s invasion of Ukraine and postponement by the central bank). The 10 most influx ETFs in Europe in the first quarter of 2022 were all bonds (US credit and sovereign, European sovereign and inflation-indexed bonds, US floating rate bonds). Overall, passive investment remained strong from January to March, with a net inflow of € 29 billion in Europe (outflow of € 132 billion for active investment).
Responsible ETFs in fashion
With respect to the net influx into Europe, ETFs have set new records for Socially Responsible Investment (SRI) products. Europe’s net inflows to SRIETFs reached € 87 billion in 2021 (€ 50 billion in 2020), surpassing the inflows of non-SRI ETFs (€ 75 billion in 2021) for the first time.
“There was a turning point for SRIETFs in 2020 and structural changes in 2021. This is not a fad. Europe is a leader in ESG / SRI indexes and is a global SRI ETF for 2021. It occupies 54% of the collection, but Bertrand Alfandari, who is observing delays in ESG bond ETF management companies with very limited offerings in Europe, said.
With the implementation of various non-financial regulations (SFDR, CSRD, taxonomy) in Europe, Quantalys is preparing for an increasingly quantitative application of the non-financial aspects of ETFs.
Among other trends, Observatory is particularly focused on the strong dynamism of thematic ETFs and the restructuring of the focus on larger thematic ETFs. Therefore, the proportion of ETFs with assets of less than € 100 million decreased from 41% to 34% in 2021.