Despite the fact that media coverage around sustainability in general has gone further down over the course of 2024, it is important to have a look at the estimated net flows in the European ETF industry by SFDR article to determine if investors have returned to sustainable investment strategies or if they still prefer ETFs without any sustainability related screening criteria. As for the year 2023, ETFs classified as article 6 products (+€214.1 bn) enjoyed the highest inflows over the course of 2024, followed by ETFs classified under article 8 of the SFDR (+€43.3 bn). Conversely, ETFs classified under article

The European fund industry enjoyed inflows of €620.2 bn over the course of 2024. That said, there are two main trends visible in the fund flows numbers which may be because most of the asset managers in Europe are not happy with their inflows over the course of the year. Firstly, there was a clear trend in the direction of ETFs, as European investors invested €256.4 bn in these products over the course of the year. Secondly, European investors bought further into money market funds (+€253.0 bn). This trend was driven by the still inverted yield curves in the major

With all the ongoing discussions around sustainable investing, it makes sense to review the estimated fund flows in the European fund industry based on the assigned SFDR articles. At first glance, it appears the trend of 2023 has continued, as mutual funds and ETFs assigned to Article 9 of the SFDR were the only category which faced outflows (-€27.8 bn) over the course of 2024.   Graph 1: Cumulative Estimated Net Flows in the European Fund Industry by SFDR Article (in bn EUR) Source: LSEG Lipper   A closer look shows that Article 9 products faced estimated net outflows in

When evaluating the fund flows and assets under management in the European ETF industry by the respective Sustainable Finance Disclosure Regulation (SFDR) articles, one should not be surprised that the European ETF industry is heavily tilted towards article 6. This means the majority of fund flows and assets under management are invested in products which do not take ESG criteria into consideration. In more detail, on August 31, 2024, 1,442.5 bn EUR, or 76.77%, of the overall assets under management were invested in ETFs assigned to article 6 of the SFDR, while 414.9 bn EUR (22.08%) were held by ETFs

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

On May 14, 2024, the European Securities and Markets Authority (ESMA) has published its final report: “Guidelines on funds’ names using ESG or sustainability- related terms“ to address greenwashing risk stemming from ESG- or sustainability-related terms used in investment fund names. The purpose of these guidelines is to specify the circumstances where the fund names using ESG or sustainability-related terms are unfair, unclear, or misleading. With regard to this, ESMA provides explanations of key terms under these guidelines. ESMA states that “the need to enhance investor protection is particularly evident when funds use terms which suggest an investment focus in

After being a hot topic for all investors and ETF promoters in 2021 and 2022, it looks like sustainable investing has fallen out of focus for European investors and the ETF industry in 2023. Nevertheless, despite the lack of headlines on sustainable investing, the industry has evolved over the course of 2023. After the publication of the much stricter than expected regulatory technical standards (RTS) in Q4 2022, the European ETF industry faced a wave of reclassifications of ETFs when it comes to their assigned SFDR article. The clarifications by the European Commission on the interpretation of the Sustainable Finance

Assets Under Management by SFDR Article The assets under management in the European fund industry increased from (+€13,313.1 bn) at the end of 2022 to (+€13,722.4 bn) at the end of September 2023, despite an unstable overall market environment. The increase in assets under management of €409.2 bn was mainly driven by positive developments in the underlying markets (+€341.3 bn), while the estimated net inflows over the course of the year so far contributed €67.9 bn to the growth in assets under management. Article 8 products were the product category with the highest assets under management (€6,155.5 bn), followed by

The European ETF industry enjoyed inflows over the course of June. These inflows occurred in a somewhat unstable but positive market environment in which some asset classes showed positive results. Meanwhile, others performed negatively over the course of the month. Market sentiment was still driven by hopes that central banks, especially the U.S. Federal Reserve, may have reached the last phase of their fight against high and increasing inflation rates and may, therefore, start to keep interest rates at least stable quite soon. Some investors already expect that there might be room for decreasing interest rates later this year. Nevertheless,

Yes! From my point of view, investors need to rethink how they approach ESG investing and which strategies they will implement, especially when we are thinking about the “E.” Under the current framework, investors favor companies which have well documented ESG strategies and are well underway to achieving their targets year after year. With the increasing knowledge about ESG investing and the permanently growing amount of data available on the different ESG measures, investors are somewhat convinced that they are doing the right thing, or at least fulfilling what regulators demand of them. But does this really help to achieve

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

Shortly before the Regulatory Technical Standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR) comes into force on January 1, 2023, the European ETF industry got hit by a wave of reclassifications with regard to categorization of ETFs by the respective SFDR articles. More broadly, it is not surprising that a number of promoters need to reclassify their funds and ETFs with regard to the SFDR since promoters were missing definitions and clarity on measurements that would assign a fund or ETF to one of the three respective SFDR articles. With the demand to classify their funds prior to the