Headline figures
Assets Under Management[1]
Chart 1: Assets Under Management of ETFs Listed on the LSE by Asset Type as of June 30, 2024 (£bn)
Source: LSEG Lipper
Total ETF assets rose by £32.56bn (up 3%) over June, driven by strong net inflows (see chart 2), growing 29.1% on an annual basis. As was the case in May, money market funds (MMFs) saw the greatest growth in percentage terms on a month-on-month basis (6.2%). Equity ETFs also grew by 3.7% over the month.
On an annualised basis, MMF ETFs also grew the most, at 51.6%, followed by equities (35%) and commodities (20.7%). Conversely, mixed-assets ETFs were once more the main negative movers, down to 64.7% of their assets 12 months ago, albeit from a low base—currently 0.1% of ETF assets.
Equity and bond funds comprise the overwhelming majority of the total, at 78.6% and 19.1%, respectively.
Flows
Flows by Asset Type
Chart 2: Estimated Net Flows in ETFs Listed on the LSE by Asset Type, June 2024 (£bn)
Source: LSEG Lipper
Total flows were down from May’s £16.47bn, at £11.6bn (£115.4bn over 12 months), but still the third highest inflows of the year.
Although Q2 equity advances were slower and more volatile than Q1, June’s direction was upwards, and equity ETFs almost the sole beneficiaries of inflows for the month, netting £11.68bn (£97.74bn over 12 months). MMFs were in the black to £582m (£3.5bn over 12 months); alternatives £28m (-£903m); and mixed assets a scant £3m (-£560m).
Bond ETFs, on the other hand, shed £515m (but up £14.5bn for the year), and commodities down £172m (£1.12bn).
Largest Inflows
Chart 3: Ten Best-Selling Lipper Global Classifications, June 2024 (£bn)
Source: LSEG Lipper
Large-cap growth, particularly tech, led markets in the second quarter in an ever-narrower rally, according to FTSE Russell analysis, and this has been reflected in ETFs flows at the classification level.
Equity markets continued May’s advances over the month, with Equity US taking £4.94bn. It also leads over 12 months, having attracted £40.66bn.
Source: LSEG Lipper
Technology has had a strong Q2, and this is reflected in positive flows for Equity Sector Information Tech, £598m. Likewise, outperformance of emerging markets was reflected in inflows to Equity India (£556m), Equity Emerging Markets Global (£555m), and Equity Mexico attracting £272m.
Equity Global took £3.93bn (£35bn over 12 months).
Source: LSEG Lipper
Although UK equity indices outperformed the global market over Q2, Equity UK ETFs saw outflows of £84m over June, and £586m over 12 months. Equity UK Small & Mid Cap did rather better, however, pulling in £143m in June and £520m over 12 months. Indeed, even unloved Equity UK Income took £12m for the month.
Largest Outflows
Chart 4: Ten Largest Outflows by Lipper Global Classification, June 2024 (£bn)
Source: LSEG Lipper
A bad month for high yield, with the largest outflows from Bond EUR High Yield (-£636m). No HY classification was in the black, with Bond USD High Yield shedding £76m, and Bond Global High Yield USD $42m. Bond Emerging Markets Global LC funds also saw significant redemptions of £287m for the month, although their hard currency equivalents netted £353m.
With the ECB cutting rates in June, it perhaps wasn’t too much of a surprise to see Bond EUR Corporates Short Term funds drop £140m. However, as can be seen from chart 4, fixed income outflows were quite broad based (Bond EUR, -£139m; Bond GBP Corporates, -£132m; and Bond USD Government, -£121m).
Commodity funds also saw something of a pullback, with the £1.06bn 12-month inflows for Commodity Blended ETFs reversed, with June outflows of £171m.
China remains in the basket case… well, basket with outflows of £120m (-£1.45bn, 12 months).
And, while Japan has enjoyed a good year, coupled with a strong market bounce from mid-month, Equity Japan funds still lost £110m, with the country also seeing a contraction in growth.
Despite the strong showing for financial stocks over the quarter, Equity Sector Financials ETFs shed £109m in June.
Sustainable ETFs
Chart 5: Sustainable ETF Sales (LHS, £m) and Estimated Net Flows (RHS, £bn), June 2024
Source: LSEG Lipper
Some £166.68bn of ETF assets on the London Stock Exchange are defined by Lipper Research as sustainable, held across 430 vehicles (see definition below), up from £161.46bn in May. The bulk (84.34%) are equity, with 15.66% in bond vehicles.
Total sustainable flows exceeded May’s £923m, taking £3bn in June—making it an exceptionally good month for sustainable flows. Sustainable equity ETFs attracted £2.87bn, while their fixed income peers took £132m, in contrast to May’s redemptions of £463m. That’s quite interesting, given the outflows overall for the asset class. Nevertheless, you must go down the table of sustainable flow quite some way before encountering a bond fund—a HC EM fund, netting £72m.
As can be seen from the table below, the top money takers strongly reflected the trend to Equity US over the month.
Source: LSEG Lipper
The Sustainable section has a narrower and stricter focus than those which indicate some form of ESG strategy in their fund documentation—to a smaller group of sustainable funds, defined as all SFDR article 9 funds plus all Lipper Responsible Investment Attribute funds reduced to those containing indicative sustainable keywords in the fund name.
Trading Volumes
Chart 6: ETF Turnover (GBP bn) and as a % of Total London Stock Exchange Order Book Turnover
Source: LSEG Lipper
The average traded value for ETFs in June was £11.44bn, up from the previous month’s £10.64bn, accounting for 12.17% of total London Stock Exchange average daily turnover, a higher proportion than for the previous month, and about average for the year to date, both in terms of volume and percentage.
Top Traded ETFs on London Stock Exchange in June 2024
Source: LSEG
Active ETFs
Chart 7: Active and Passive, Total Net Assets (LHS, %), and Estimated Net Flows (RHS, £bn), June 2024
Source: LSEG Lipper
There are 85 active and 1,706 passive ETFs listed on the LSE. Active ETFs total net assets were 1.79% of the total, or £20.21bn. Active ETFs saw inflows of £867m, broadly the same as May’s £839m, with flows dominated by JP Morgan, which took £797m (see table below). No other promoter took more than £20m into actively managed ETFs. What’s also of note in the table below is that, as in the previous three months, all its members are ESG funds.
Meanwhile, passive ETFs attracted £10.84bn.
Table: Five Best-selling Active ETFs, June 2024 (£m)
Source: LSEG Lipper
New Listings
Chart 8: New listings on the London Stock Exchange since 2004
Source: LSEG Lipper
There have been 100 launches year to date. Some 13 were over June. Of the 13 launches this month, three were bond, with the rest being equity.
There are six launches from Amundi, covering such areas as Future Mobility, Digital Economy, Disruptive Technology, and industries benefiting from the preferences of Millennials (top holding: Nvidia) (see table overleaf).
New Launches, June 2024
Source: LSEG Lipper
Flows by Promoter
Chart 9: 10 Best-Selling ETF Promoter for ETFs Listed on LSE, June 2024 (£bn)
Source: LSEG Lipper
There are 29 promoters with ETFs on the LSE. Two had flows of more than £1bn over June, down from May’s five, with the largest being BlackRock (£4.45bn). BlackRock netted £4.38bn in equity flows, while the bulk of second-placed Vanguard went to equity ETFs (£1.25bn of £1.47bn).
Nine more accounted for flows of more than £100m, while four suffered outflows.
[1] This report covers all assets under management and estimated net flows for ETFs listed on the London Stock Exchange. This means while turnover and trading volume are measures that are taken per exchange, flows and assets under management can only be calculated on a pan-European basis, since most ETFs in this report are cross-listed on various exchanges.
