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European-domiciled ETF flows maintained their positive momentum in April, reflecting an uptick in risk assets during the period. European-domiciled ETFs registered $15.5 billion of inflows for the month, after garnering $15.3 billion of positive flows the previous month1. Equity ($8.3 billion) and fixed income ($7.2 billion) products accounted for the large part of net new assets, while commodities ($38 million) and alternatives ($13 million) ETFs also saw positive flows.
Within equities, core strategies remained the largest contributor to inflows in April, taking in $5.1 billion. Inflows into core equity products were concentrated in world exposures ($4.9 billion), while United States (-$711 million) and Switzerland (-$305 million) core products experienced outflows. Sustainable ETF exposures were again the second most-popular category, with $2.8 billion of total inflows; here, new investments into world ($1.0 billion), Japan ($626 million) and emerging market ($519 million) sustainable exposures were the biggest contributors to total flows, while Europe (-$159 million) and UK (-$101 million) sustainable vehicles detracted from flows. Sector ETFs also saw investor demand in April, attracting $913 million in flows across markets, with United States exposures ($767 million) the leading contributor. Global sector exposures, however, saw $57 million of outflows during the month. In spite of the overall inflows into European ETFs during the month, smart beta strategies bucked the trend, with -$482 million of net outflows in April, which were mainly driven by redemptions from Europe (-$260 million) and world (-$169 million) products.
In fixed income, total inflows of $7.2 billion were primarily driven by new assets coming into government ($3.3 billion) and corporate ($2.7 billion) bond strategies, while inflation-linked (-$246 million) and floating-rate (-$168 million) fixed income exposures both saw outflows. Within government bond ETFs, United States ($2.0 billion) and eurozone ($697 million) exposures led the inflows. Within corporate bond ETFs, too, eurozone and United States exposures were the main drivers of inflows, with $2.4 billion and $399 million of net new assets, respectively. United States exposures were the largest driver of outflows from both the inflation-linked and floating-rate bond categories, with outflows of -$254 million and -$116 million, respectively.
Commodity ETFs saw net inflows of $38 million, mainly fuelled by inflows into broad commodity exposures ($190 million), which were offset in part by net outflows from precious metals ETFs (-$128 million).
In April, the Vanguard UCITS ETF range captured net inflows of $1.6 billion, as the majority of Vanguard UCITS ETFs recorded positive flows. Flows were split between Vanguard’s fixed income UCITS ETF range ($804 million) and equity UCITS ETF range ($769 million).
In equities, inflows were led by the Vanguard S&P 500 UCITS ETF ($287 million) followed by the Vanguard FTSE All-World UCITS ETF ($195 million) and the Vanguard FTSE Developed World UCITS ETF ($103 million).
In fixed income, the primary drivers of inflows were the Vanguard U.S. Treasury 0-1 Year Bond UCITS ETF ($314 million), followed by the Vanguard USD Treasury Bond UCITS ETF ($130 million). In the ESG category, Vanguard’s ESG UCITS ETF range recorded inflows of $30 million over the month, primarily driven by flows into the Vanguard ESG Global Corporate Bond UCITS ETF ($13 million).
1 Source: ETFbook, as at 28 April 2023.
Important risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.
Investments in smaller companies may be more volatile than investments in well-established blue chip companies.
ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.
Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.
The Funds may use derivatives in order to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Fund's net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.
Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.
For further information on risks please see the “Risk Factors” section of the prospectus on our website at https://global.vanguard.com.
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