September 'challenging' for investors but ETFs prove resilient

The S&P 500 recorded its largest monthly drop in 2021, hit by higher government bond yields at the end of the month, the report highlighted. Nevertheless, despite the market volatility, European ETFs attracted a “solid” €13.3bn in net new assets over the month.

Equity ETFs took the lion’s share of new investment and saw €7.7bn of inflows while fixed income ETFs drew in €5.3bn.

Since the start of 2021, flows into ESG ETFs – which took in €3.7bn in September – represent almost half of the total ETF flows for the year, Lyxor noted.

Passive trumps active in latest Morningstar Barometer

Year-to-date, equities have attracted €93.2bn while fixed income trail behind with €30.1bn of net inflows.

For US-domiciled ETFs and index funds, nearly all inflows into passive vehicles were “mirrored by substantial” outflows from active funds, the report also highlighted.

Lyxor commented about the European ETF market that “despite the fantastic expansion of passive investments over recent years, the overall market structure remains less mature than the US’s.

“Passive equity flows have taken the lead but with a much smaller margin (€681bn vs €370bn over the last 10 years). Interestingly, flows into active equity exposures have accelerated since July 2020.”


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