The bulk of inflows has gone to gold, with two physical gold ETCs – Source Physical Gold ETC and ETF Securities Gold Bullion ETC – among the top-three money-gathering products of the quarter.
iShares was the top money-gathering ETF provider in the first quarter of 2016, netting in just over €5bn of new investment. In second place, ETF Securities – the market leading provider of commodity products – benefited from risk-aversion flows into gold products in February, netting in just over €2bn of new investment over the quarter.
Smart thinking
Some of iShares strategic beta products – for example, iShares S&P 500 Minimum Volatility – did particularly well in the face of volatile market conditions.
However, as a whole, the analysis of the monthly data clearly shows the strength of its fixed-income offering in March played the key role in securing the top position. Indeed, when it comes to fixed income, iShares’ grip on the European ETF marketplace is particularly strong, with over 60% of AUM in bond ETFs under its realm.
Other providers are keen to grab a piece of the ever-expanding fixed-income cake. A large majority of new ETF launches in Q1 were bond ETFs. For example, State Street greatly expanded its offering, and it seems that the move paid off, as fixed-income flows in March were fundamental in securing the provider a solid quarterly outcome.
Strategic beta
Meanwhile, after keeping the market waiting for a few years, Vanguard finally saw fit to complement its equity ETF offering with a suite of fixed-income ETFs. Flow-wise, the first quarter of 2016 was particularly disappointing for db x-trackers and a neutral period for Lyxor, although both comfortably held on to second and third place respectively in the AUM league table.
Strategic beta – commonly known as smart beta – ETFs attracted €2.7bn in net new money in the first quarter. This accounted for 27% of the total for the entire European ETF market. AUM in these products has increased to €33.6bn and accounts for 7.3% of the total market.
