Headline figures
Assets Under Management[1]
Chart 1: Assets Under Management of ETFs Listed on the LSE by Asset Type as of August 30, 2024 (£bn)
Source: LSEG Lipper
Total ETF assets were £1.15bn in August, growing 29.1% on an annual basis. Money market funds (MMFs) saw the greatest growth in percentage terms on a month-on-month and year-on-year basis (8.3% and 56.3%), but from a low base.
On an annualised basis, equities grew by 35.2% and bonds by 10.1%. Conversely, mixed-assets ETFs were once more the main negative movers, down to 69.1% of their assets 12 months ago, and currently 0.1% of ETF assets. Commodity and alternatives assets also shrank on a 12-month view, with commodity assets seeing the largest monthly drop, at 90.1% of their July value.
Equity and bond funds comprise the bulk of the total: at 78.6% and 19%, respectively.
Flows
Flows by Asset Type
Chart 2: Estimated Net Flows in ETFs Listed on the LSE by Asset Type, August 2024 (£bn)
Source: LSEG Lipper
Fears over the state of the US economy caused short-lived ructions in financial markets globally. Equity markets saw significant falls in early August, along with US Treasury yields, before clawing them back over the rest of the month.
Nevertheless, total flows for August were up from July’s £10.2bn, at £13.5bn (£124.02bn over 12 months).
Despite these concerns, and global equities showing muted returns over the month, equity ETFs again saw the largest inflows, at £10.74bn, well up on July’s £6.16bn (and £10.59bn over 12 months). Bonds attracted half July’s £3.2bn, at £1.6bn (£14.24bn for 12 months), while MMFs were in the black to £1.34m (£5.11bn); and mixed assets £0.4m (-£552m). Commodity ETFs suffered outflows of £531m (£257m), with alternatives seeing the heaviest outflows of £115m (-£430m).
Largest Inflows
Chart 3: Ten Best-Selling Lipper Global Classifications, August 2024 (£bn)
Source: LSEG Lipper
Equity Global (£3.75bn/£37.01bn for the year) and Equity US (£3.57bn/£43.1bn) were the two top-selling classifications for the month, as they were last month, but reversing their rankings for August. Money Market USD was once more the third best-selling classification, netting £1.22bn.
Bond EUR Corporates was the best-selling fixed income classification, as was the case last month, with inflows of 978m, followed by Bond USD Corporates (£868m).
Source: LSEG Lipper
Last month, we pondered whether market volatility would see the return to prominence of equally weighted US ETFs. Looking at the table below, the simple answer is ‘no’, although two Xtrackers S&P 500 Equal Weight ETFs together attracted £434m. Otherwise, it’s plain vanilla exposure to the S&P, JPMorgan’s active ESG vehicle notwithstanding.
Source: LSEG Lipper
Equity Sector Information Tech saw increased flows, to £513m, despite ongoing valuation concerns.
Although not making it into the table, it’s worth noting that Equity UK Small & Mid Cap took £153m for the month, down on the previous but still denoting an uptick in interest for the classification. Inflows for July’s fourth highest-selling classification, Equity US Small & Mid Cap, were well down, however, netting just £13m.
Largest Outflows
Chart 4: Ten Largest Outflows by Lipper Global Classification, August 2024 (£bn)
Source: LSEG Lipper
The largest outflows in August look very different than they did the previous one, though base effect muddies the waters here, as what’s coming out is a fraction of what’s going in (-£3.07bn versus £16.57bn). While commodities saw the largest outflows in July, August saw investors pull 628m from Bond USD Inflation Linked. Alongside this, it’s interesting to note that the entire £192m coming out of Alternative Managed Futures is from a US Curve steepening 2-10 product. So investors have been focused on inflation over the month.
Local currency EM and CNY bonds also fared poorly, together losing £445m, with Bond USD Government seeing outflows of £348m.
China was the least popular equity classification (-£145m), followed by Equity Sector Energy (-£126m), Japan (-£106m), and
UK (-£96).
Sustainable ETFs
Chart 5: Sustainable ETF Sales (LHS, £m) and Estimated Net Flows (RHS, £bn), August 2024
Source: LSEG Lipper
Total sustainable flows were similar to the doldrum month of July, taking just £214m in August. The months look quite similar in terms of asset class funds as well, as equity ETFs saw outflows of £332m, while their fixed income peers took £545m. As is the case with total flows, Equity Global and Equity US dominate inflows (see table below).
Some £167.97bn of ETF assets on the London Stock Exchange are defined by Lipper Research as sustainable, slightly up from July’s £166.68bn, held across 425 vehicles (see definition below). The bulk (83.63%) are equity, with 16.37% in bond vehicles.
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
Very strong growth demonstrated this month. The average traded value for ETFs in August was £15.61bn (the fourth highest of all time), up from the previous month’s £12.87bn, accounting for 18.85% of total London Stock Exchange average daily turnover, the highest of all time.
Top Traded ETFs on London Stock Exchange in August 2024
Source: LSEG
The table above reflects the dominant flows to Equity US and Global funds (six out of the top 10). However, continuing and strengthening the previous month’s trend there are two FTSE 250 funds, along with one FTSE 100.
Active ETFs
Chart 7: Active and Passive, Total Net Assets (LHS, %), and Estimated Net Flows (RHS, £bn), August 2024
Source: LSEG Lipper
There are 82 active and 1,712 passive ETFs listed on the LSE. Active ETFs total net assets were 1.87% of the total, or £20.61bn. Active ETFs saw inflows of £1.04bn, bn from July’s £697m, reflecting the stronger flows for the month. Flows were dominated by JP Morgan, which took £1.01bn (see table below). HSBC had the second-largest sustainable flows, at £37m.
Meanwhile, passive ETFs attracted £13.5bn.
Table: Five Best-selling Active ETFs, August 2024 (£m)
Source: LSEG Lipper
New Listings
Chart 8: New listings on the London Stock Exchange since 2004
Source: LSEG Lipper
Something of a summer hiatus this month. There have been 117 launches year to date, only one launched in August—categorised as Commodity Blended by Lippper.
New Launches, August 2024
Source: LSEG Lipper
Flows by Promoter
Chart 9: 10 Best-Selling ETF Promoter for ETFs Listed on LSE, August 2024 (£bn)
Source: LSEG Lipper
There are 28 promoters with ETFs on the LSE. Four had flows of more than £1bn over August, the same as July, with the largest being BlackRock (£6.03bn). BlackRock netted £4.38bn in equity and £567m in equity flows, while the bulk of second-placed Vanguard’s £2.32bn went to equity ETFs (£1.91bn).
Eleven providers 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.
