European-domiciled ETFs inflows saw a slowdown in October ($12.4 billion) relative to the previous month ($15.3 billion). Equity ETF exposures again took largest share of market inflows ($11.3 billion) while fixed income ETF inflows reduced pace to $0.7 billion for the month, after attracting $5.5 billion in September. Commodity ETFs experienced inflows of $70 million.
Within equities, sustainable ETF exposures led the inflows, taking in $5.8 billion for the month, followed by core equity ETF strategies ($3.1 billion). Sustainable ETF flows mainly went into US ($ 1.7 billion) and world ($1.6 billion) exposures, while Japan ($0.6 billion), Europe ($0.6 billion) and emerging markets ($0.5 billion) sustainable equity ETFs also benefitted from inflows. Core equity ETF inflows were dominated by US exposures ($1.2 billion), with all-world ($0.6 billion) and world ($0.6 billion) ETFs also receiving inflows, while eurozone core equity ETFs suffered outflows (-$0.5 billion). Outflows from market-capitalisation segment ETFs (-$0.7 billion) were primarily driven by negative flows from UK exposures (-$0.6 billion).
In fixed income, inflation-linked and floating-rate bond ETFs dominated the inflows, contributing $0.6 billion and $0.2 billion respectively to the asset class’s total inflows ($0.7 billion). Within inflation-linked ETFs, the eurozone exposures led the inflows ($0.5 billion), followed by US strategies ($0.2 billion). Within floating-rate bond ETFs, inflows were led by US exposures ($172 million). Corporate bond ETF exposures saw net outflows of $0.4 billion for the month, as outflows from eurozone corporate bond ETFs (-$0.6 billion) were offset in part by inflows into Russia ($57 million) and UK ($51 million) exposures.
Commodities ETFs experienced modest inflows ($70 million) in October after suffering negative flows of -$44 million the previous month. Commodity ETF Inflows went largely into ex-energy ($58 million) and precious metals ($42 million) exposures, while there were outflows from broad commodity exposures (-$93 million).
The Vanguard UCITS range captured net inflows of approximately $0.9 billion in October, primarily driven by inflows into the equity range ($0.7 billion). This month equity ETF inflows mainly went into the Vanguard S&P 500 UCITS ETF ($0.2 billion) and the Vanguard Developed Europe ex UK UCITS ETF ($0.1 billion), while the Vanguard FTSE 250 UCITS ETF (-$0.2 billion) saw outflows. In fixed income, the Vanguard EUR Eurozone Government Bond UCITS ETF ($79 million) was the largest contributor to the total inflows into the asset class ($0.1 billion).
The Vanguard LifeStrategy UCITS ETF range continued to see investor demand, benefitting from $40 million of total inflows in October.
1 Source: Vanguard, ETFbook, as at 29 October 2021. Data extracted on 3 November 2021.
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.
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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