ETFs Lead in Investor Inflows Over Mutual Funds: Bond Products Shine in February

ETFs have outpaced mutual funds in attracting investor funds during the first two months of the year, with estimates showing ETF promoters receiving €37.1 billion in net flows compared to €16.7 billion for mutual funds, according to data from LSEG Lipper.

In February alone, ETFs attracted €16 billion in net inflows, while mutual funds experienced €5.9 billion in outflows.

Bond products emerged as the top-selling asset type in February, with inflows totaling €31.4 billion. Overall, bond products have seen the highest estimated net inflows of €61.1 billion for the year 2024 so far.

Detlef Glow, head of Emea Research at LSEG Lipper, attributed market sentiment to hopes that central banks, particularly the US Federal Reserve, were nearing the end of their battle against inflation. Glow noted that despite the US Fed's statements in January suggesting a possible start to lowering interest rates, this did not seem to deter investors from allocating funds to bond ETFs.

“It looks like this statement has not impacted the estimated inflows in bond ETFs,” Glow remarked.

UBS emerged as the top-selling fund promoter in Europe for February, with net inflows of €7.4 billion. Meanwhile, HSBC holds the title of the best-selling fund promoter in Europe for the entirety of 2024 so far, with net inflows totaling €10.1 billion.

The data underscores the continued popularity of ETFs among investors, particularly in the bond market, amidst ongoing market volatility and central bank actions.

By fLEXI tEAM