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NEWSLETTER | 18 October 2024

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2024 is set to be a record year all round for asset flows into ETFs. And Europe is looking particularly fine, according to data firm Morningstar, which shows that the third quarter saw European ETFs gather EUR63 billion of flows, up from EUR53 billion in the second quarter.

This was a new quarterly high, the firm writes. Flows in the first three quarters of 2024 totalled EUR161 billion, surpassing the total for 2023 and the previous annual high of EUR159 billion in 2021. With a quarter still to account, 2024 is bound to be a new record-breaking year for the European ETF industry, the firm says.

Drilling down to specific European markets, ratings agency Scope brought us some interesting research on the appetite for ETFs in Germany this week. Scope says growth in the active ETF market segment in Germany has been rapid in the past year, with AUM of around EUR42 billion at end August, more than 60 per cent higher than just over a year ago when AUM stood at EUR26 billion at end June.

Our writer, Peter Taberner, took a look at the appetite for active ETFs this week – quoting Nicholas Phillips, the president of ETF Capital Markets Advisors, who says: "Consumer demand is a key driver here, investors prefer the transparency of ETFs, real-time pricing, the ability to trade throughout the day, and the tax efficiency ETFs offer compared to mutual funds."

Crypto assets dominated the Trackinsight ETF data again this week, and we have a report from PwC and AIMA which finds that crypto ETPs have encouraged confidence in the crypto sector. The report said: "Among those already invested, 67 per cent plan to increase their exposure over the next year, with none planning to reduce, a marked increase from 46 per cent a year ago. This may be spurred on by the successful launch of spot bitcoin ETFs, which 64 per cent of respondents view as a positive development for the digital assets industry."

Finally, we have an In My Opinion this week from David McGuinness, Calastone’s product director, who writes that even though T+1 is yet to formally arrive on EU shores, eyes are already on the impact, with 38 per cent of ETF issuers citing T+1 settlement as the biggest challenge they face.

We are very pleased to be able to bring our readers a discount at the December Inside ETFs’ Canada event. The programme is here, and please use this discount code, ETFExpress2024, for 20 per cent off.

We are also pleased to bring you a discount for a London-based responsible investment conference. This code, ETF20, will gain you a 20 per cent discount on tickets to attend RAO Global’s symposium on 21st November in London. The event details are here.

Beverly Chandler, Managing Editor

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Assets under management are on the rise, new funds are being created, and new providers are entering the active ETFs segment, with ETFs with a five-year record performing well, says rating agency Scope.

The growth in assets in actively managed ETFs is accelerating at a rapid pace, and it’s viewed to be a lasting trend despite remaining for now a small segment of the ETF market in terms of assets.

PwC, in conjunction with the Alternative Investment Management Association (AIMA), has published its 2024 Global Crypto Hedge Fund Report.

David McGuinness, Calastone’s product director, writes that over the last 30 years, security settlement times have slowly been shortened to satisfy the needs of investors for immediacy, reduced risk, and standardisation across regions.

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