ETF Snapshot: European Large-cap Flows Plummet Following ECB Tapering Move

ETF Watch

ETF Watch

In the week ending 27 October, European large caps suffered a significant drop in flows, according to data from TrackInsight, after the European Central Bank (ECB) announced plans to cut back its €2trn bond-buying programme.

The asset class saw inflows of just €2m compared to €439m and €172m the two weeks prior respectively, as the ECB announced it would reduce its quantitative easing (QE) programme from €60bn to €30bn of asset purchases a month as of January 2018.

The Governing Council announced on 26 October this would continue until September next year "or beyond, if necessary" if the outlook became "less favourable".

However, investors continued to pour into US large caps, which saw €2bn of inflows, on the back of US President Donald Trump's tax reforms which were passed in both the Senate and House of Representatives last month.

Small caps and global stocks also posted inflows of €1.7bn and €1.3bn. Meanwhile, Asian large caps and emerging stocks saw positive flows of €208m and €48m respectively, meaning all equity asset classes were in the black.

In the fixed income space, high yield bonds saw inflows after €402m of outflows the previous week, while emerging bonds suffered €245m of outflows.

Investment grade bonds recorded the highest fixed income flows of €1.8bn, while government bonds also saw inflows of €841m.

TrackInsight's data covers both US and European-listed ETFs that in combination make up around 70% of the total market.

ETF weekly data flows

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