Since the Sustainable Finance Disclosure Regulation (SFDR) is a topic of interest for all kinds of market participants and observers, it is worthwhile to shed a light on the current assets under management and the fund flow trends in the European ETF industry with regard to the SFDR.   Assets Under Management by SFDR Article With regard to overall structure of the European ETF industry, it is no surprise that the vast majority of the assets under management (€1,392.3 bn, or 76.74% of the overall AUM) was held by ETFs classified as article 6 compliant. Since the majority of ETFs

There were 3.478 products listed in the Lipper database at the end of December 2022. 1.856 of the products were so-called primary share classes which represent the ETF portfolio, while 1.622 were so-called convenience share classes—for example, sub-share classes of an ETF portfolio which have an additional feature compared to the primary share class such as a denomination in a different currency or a currency hedge, etc. Since the primary share class does represent the respective ETF, the following analysis is based on primaries only. The vast majority of the ETFs in Europe are equity ETFs (1,295), followed by bond

It was not surprising that the year 2022 so far has been in general a negative period for the European fund industry given the geopolitical situation in Europe, the still ongoing COVID-19 pandemic, disrupted delivery chains, rising inflation, increasing interest rates, and the resulting sluggish market environment. Within this market environment and given the economic uncertainties, one would expect that European investors sold long-term funds and bought money market products. Therefore, it is somewhat surprising that European investors sold money market products, which are normally considered safe-haven investments. Note: As this report also covers markets outside the EU, such as

Sustainability-oriented investors should expect to find some unexpected holdings in their portfolio when they choose products with a swap-based (synthetic) index replication approach. While index products with a full replication approach hold normally only the constituents of their respective index, the portfolio of a synthetic product is built with a swap that replicates the risk/return profile of the respective index and the so-called collateral. The securities held as collateral are often chosen based on their liquidity and transaction costs, as this helps to minimize the costs of managing the product. If the securities for the collateral are not chosen with

It was not surprising that Q1 2022 was in general a negative quarter for the European fund industry given the geopolitical situation in Europe, the still ongoing COVID-19 pandemic, and the sluggish market environment. Within this market environment and given the economic uncertainties, one would expect that European investors sold long-term funds and bought money market products. Therefore, it is somewhat surprising that European investors sold money market products, which are normally considered safe-haven investments, while long-term products enjoyed overall inflows.   Note: As this report covers also markets outside the EU, like the UK and Switzerland, a high number

The introduction of the Sustainable Finance Disclosure Regulation (SFDR) is seen as one of the key milestones for the accomplishment of the EU action plan for financing sustainable growth. Even as the guidelines for the implementation of the technical standards of this regulation are not finalized yet, it is worthwhile to analyze how fund promoters and investors act with regard to fund launches and investments under the new SFDR classifications according to the articles six, eight, and nine. While the former can be measured by the number of funds (primary share classes) classified as article six, eight, or nine compliant,