European equity ETFs second only to Global equities in net new assets
Gold the best-performing asset in Q1 with 19% return
Q1 flows into fixed income products remained strong, totalling US$13.8bn
The European ETF market had its best quarter in terms of flows, with US$93 billion of NNA in Q1 eclipsing the US$91 billion in Q4 2024. The total AUM of US$2.38 trillion at the end of the quarter was helped by strong commodity returns (particularly from gold) and solid gains in fixed income markets. Equity returns were broadly flat in the quarter.
The percentage of flows going into equities (80%) was in-line with the average in 2024, but we saw a shift away from the US towards Europe as the quarter progressed. This included broad European exposures, country-specific (namely Germany) and sectors. Global equities took top spot in the quarter, while smart beta continued to see increased demand. Equal weight, low volatility, value and high dividends were among the more defensive strategies that gathered interest as equity markets came under pressure.
Investors' risk-off attitude was also reflected in fixed income and commodity flows. Cash management was the only fixed income category that made it into the top 10 for net inflows although Euro government bonds also saw healthy demand. Sentiment towards US Treasuries waned in March, but net flows remained positive for the quarter.
Gold was the big winner in the commodity asset class. Flows into gold ETPs have been positive for the past four months after being largely absent for most of the gold price rally before then. Gold was the best-performing asset in Q1 with a 19% return, driven by the allure of its perceived "safe haven" characteristics as equity markets fell and the economic outlook became increasingly uncertain.
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Value fluctuation: The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.
Invesco MSCI Europe Equal Weight UCITS ETF: The value of equities and equity-related securities can be affected by a number of factors including the activities and results of the issuer and general and regional economic and market conditions. This may result in fluctuations in the value of the Fund. The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.
Invesco Physical Gold ETC: Instruments providing exposure to commodities are generally considered to be high risk which means there is a greater risk of large fluctuations in the value of the instrument. If the issuer cannot pay the specified return, the proceeds from the sale of the precious metal will be used to repay investors. Investors will have no claim on the other assets of the issuer.
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Data as at 21 April 2025 unless otherwise stated.
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EMEA4410551/2025
