These outflows occurred in a negative and volatile market environment in which investor sentiment was impacted by high inflation rates, increasing interest rates, a market turmoil in UK government bonds, geopolitical tensions, and disrupted delivery chains caused by the still ongoing COVID-19 pandemic in Europe and other parts of the world. The performance of the underlying markets led to decreasing assets under management (from €1,283.5 bn as of August 31, 2022, to €1,203.1 bn at the end of September). In more detail, the decrease of €80.3 bn for September was driven by the performance of the underlying markets (-€76.5 bn), while estimated net outflows contributed (-€3.9 bn) to the assets under management.

As for the overall structure of the European ETF industry, it was not surprising equity funds (€851.4 bn) held the majority of assets, followed by bond funds (€304.3 bn), commodities products (€33.3 bn), alternative UCITS products (€6.7 bn), money market funds (€4.4 bn), mixed-assets funds (€3.0 bn), and “other” funds (€0.1 bn).

Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, September 30, 2022

Source: Refinitiv Lipper

Fund Flows by Asset Type

The European ETF industry faced estimated net outflows (-€3.9 bn). As to be expected, these flows were far below the rolling 12-month average (€7.2 bn).

The outflows in the European ETF industry for September were driven by bond ETFs (-€2.6bn), followed by equity ETFs (-€1.4 bn), commodities ETFs (-€0.2 bn), and mixed-assets ETFs (-€0.007 bn). On the other side of the table, money market ETFs (+€0.4 bn) enjoyed the highest inflows for September 2022, followed by alternative UCITS ETFs (+€0.02 bn), and ”other” ETFs (+€0.008 bn).

This flow pattern drove the estimated overall net flows to negative €3.9 bn for the month and positive €52.2 bn for the year 2022 so far. Given the general market environment with rising interest rates, it was not surprising that bond ETFs faced the highest outflows for the month.