Refinitiv: European investors were generally in a risk-on mode over the course of 2021 which could be seen by the fact that equity funds were the best-selling asset type overall.
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By Detlef Glow, Lipper’s head of EMEA research at Refinitiv
In fact, 2021 was a superb year for the European fund industry as the promoters of mutual funds and ETFs enjoyed record inflows (€724.1 bn) over the course of 2021. These inflows come despite the unclear economic situation caused by the ongoing COVID-19 pandemic, disruptions in the delivery chains of some industry sectors, and steadily rising inflation.
That said, it is remarkable that 2021 was the second year in a row during a global crisis in which the European fund industry enjoyed record inflows. These strong inflows are somewhat surprising since companies and investors had to weather the uncertainty and impacts caused by the COVID-19 pandemic, which should have led under normal circumstances to more cautious behavior from investors. Therefore, it can be assumed that the massive financial and fiscal actions taken by governments and central banks around the globe have boosted the confidence of investors to stay in a risk-on mode.
Therefore, it was not surprising that the European ETF industry hit new records in this environment.
Assets Under Management
Despite these tough market conditions, 2021 marked the twenty-second consecutive year with inflows into ETFs, which means that ETFs have never witnessed outflows on an annual basis since their inception in Europe in 2000. The positive performance of the underlying markets led in combination with the estimated net inflows to increasing assets under management (from €992.6 bn as of December 31, 2020, to €1,330.2 bn at the end of December 2021). This means the European ETF industry hit another milestone since the assets under management stood at the first time in history above €1.0 tr. The increase of €337.6 bn for 2021 was driven by the performance of the underlying markets (+€176.6 bn), while estimated net sales contributed €161.0 bn to the increase of assets under management in the European ETF industry.
Graph 1: Assets Under Management in the European ETF Industry, January 1, 2000 – December 31, 2021
Source: Refinitiv Lipper
It was not surprising equity funds (€970.3 bn) held the majority of assets, followed by bond funds (€315.0 bn), commodities products (€31.7 bn), alternative UCITS products (€6.9 bn), mixed-assets funds (€3.1 bn), money market funds (€3.1 bn), and “other” funds (€0.1 bn).
Graph 2: Market Share, Assets Under Management in the European ETF Segment by Asset Type, December 31, 2021
Source: Refinitiv Lipper
Source: ETFWorld
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