By Marlène Hassine Konqui, Head of ETF Research and Kristo … Money Monitor Decem… · saw in...

1For professional clients only*

This document is for the exclusive use of investors acting on their own account and categorised either as “eligible counterparties” or “professional clients” within the meaning of markets in financial instruments directive 2004/39/ce.

Informed Investor: Money Monitor January 2019

By Marlène Hassine Konqui, Head of ETF Research and Kristo Durbaku, ETF Research Analyst

€1.4bn-€208m

Commodities still suffering

Flows surged into Smart Beta

Net new assets in the European ETF market tripled to €7.6bn in January from the €2.5bn we saw in December. Equity flows rebounded (€1.6bn from -€1.5bn) led by strong inflows into emerging markets equities (€2.4bn). In contrast, their developed market counterparts suffered a poor start due to some significant outflows (-€2bn) from US equities.

Having lagged way behind equities in 2018, fixed income ETFs enjoyed their best month ever (€6.2bn), led by developed and emerging market government bonds (€2.2bn and €2.4bn respectively). Smart Beta ETFs also enjoyed a largely positive month with net new assets of €1.4bn, but commodity flows continued their seemingly endless decline.

A happy new year for European ETFs

ETF flows tripled to €7.6bn from €2.5bn

Strong start to the year for the European ETF market €7.6bn

What happened last month?

Record month for fixed income

€1.6bn €6.2bn

Rebound for equities

Source: Monthly data in EURM from 01/01/2019 to 31/01/2019 Bloomberg, Lyxor. The figures relating to past performances refer to past periods and are not a reliable indicator for future results.Note: This report is based on the data available on 01/01/2018. Asset and flow data may be slightly adjusted as additional data becomes available.



What were the major trends?

Source: Monthly data in EURM from 01/01/2019 to 31/01/2019, Bloomberg, Lyxor. The figures relating to past performances refer to past periods and are not a reliable indicator for future results.

What were the major trends?

Monthly net inflows on European Equity ETFs

Monthly net inflows on European Fixed Income ETFs

Modest rebound for equities

Record month for fixed income €6.2bn

€1.6bn

2,198Developed

Market Govies

1,505of wh. Europe

Govies

2,380Emerging MarketGovies

135High Yield

-8Money Market

304Inflation Linked

625Coprporate

Bonds423

of wh. US Govies

-1,288Developed

Market Equities -2,010

of wh. US Equities -850 of wh. Europe

Equities

2,424Emerging Market

Equities

499Global Equities

408 of wh. World Equities

594of wh. Asia Pacific

Equities

Major decline in US equity flows

Europe equities still suffering

Emerging equities again enjoy strong inflows

Outflows from Japan equities stalled

Corporate bond flows rebound

Another strong month for euro government bonds

Outflows from inflation-linked bonds stemmed

Flows into emerging govies doubled



Investors turn defensiveInvestors continued to reinforce their defensive positioning in January after all of the equity market volatility we saw in Q4. This helped to sustain inflows into some Smart Beta strategies. Net new assets of €1.4bn – split between developed (€1bn) and emerging (€400m) markets – amounted to the second-best month over one year.

Quality strategies and income-generating ETFs led the way and reached a record high of €1bn. Nearly all of these flows were concentrated in developed markets. Europe took the lion’s share with €451m of inflows – another new record. This is all the more remarkable given traditional European equities

suffered outflows of €1.3bn. Attractive equity valuations kept investors interested and invested, despite the significant economic uncertainty.

Investment into other defensive strategies were also significant. Minimum volatility and low volatility factor strategies gathered inflows of €496m – albeit those flows were mainly concentrated in the emerging markets (€340m).

Ultimately, we expect this renewed interest in Smart Beta to endure for some months given significant political and economic uncertainties and improvements in the credit markets.

Special focus

Source: Monthly data from 01/01/2016 to 31/01/2019, Bloomberg, Lyxor Cross Asset Research, Lyxor ETF. The figures relating to past performances refer to past periods and are not a reliable indicator for future results.

European Quality ETF monthly flows vs. euro investment-grade corporate bond index*

Defensive Smart Beta ETF flows vs. 60-day historical volatility*

0

500

400

300

200

100

-100

-200

218

223

222

221

220

219

217

216Jan-2018

Feb-2018

Mar-2018

Apr-2018

May2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

Europe Quality ETF flows (lhs) Markit Euro IG corporate bond index (rhs)

Improving credit market should support Quality ETF flows in Europe

in €M

1,200

1,000

800

600

400

200

0

-200

-400

-600

-800

-1,000

32

27

22

17

12

7

2

-3

-8

Mar-201

6May

2016

Jul-20

16Se

p-2016

Nov-201

6Jan

-2017

Mar-201

7May

2017

Jul-20

17Se

p-2017

Nov-201

7Jan

-2018

Mar-201

8May

2018

Jul-20

18Se

p-2018

Nov-201

8Jan

-2019

Increasing volatility should defensive smart beta strategy flows

Defensive Smart beta ETF flows (lhs)

Jan-16

Mar-16

May-16

Jul-16

Sep-16

Nov-16

Jan-17

Mar-17

May17

Jul-17

Sep-17

Nov-17

Jan-18

Mar-18

May18

Jul-18

Sep-18

Nov-18

Jan-19

60d historical volatility SX5E (rhs)

in €M

in %

€1.4bnNear-record inflows

*including income generation and Quality factor strategies flows.Source: Lyxor ETF, Bloomberg data from 01/01/2018 to 31/01/2019.

*including min volatility and low vol /low beta factor strategy flows.Source: Lyxor ETF, Bloomberg data from 01/01/2016 to 31/01/2019.



What does it all mean?

Explore our online analytics toolswww.lyxoretf.co.uk/en/instit/etfresearch/type/monthly-flows

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Find out whether the money is going to the right place with our Manager Monitor

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Best start ever for fixed income ETFs

Commodity ETFs started 2019 as they finished 2018

– in the red

YTD net Inflows on European ETFs by asset class

€7.6bn

Total AUM is up 6.7% since 2018ETFs on the rise

€675bn

A happy new year for ETFs

Total Equities

1,635

Developed Market Equities

-1,288 of wh. US Equities

-2,010

594of wh.

Asia PacificEquities

-850of wh. Europe Equities

625Corporate

bonds 135High Yield

of wh. World

Equities

408

Emerging Market Equities

2,424

Global Equities

499

Total Fixed

Income

6,156

DevelopedMarketGovies

2,198 of wh. Europe Govies

1,505

304Inflation Linked

of wh.US Govies

423

Emerging Market Govies

2,380

-8Money Market

-208Commodities

Weak start for equity ETFs



Appendix: The month in numbersTotal

Equity Equity Emerging MarketWeak start for equities Cumulated monthly NNA on equity ETFs

Fixed income CommoditiesAll-time record for fixed income flows Cumulated monthly NNA on fixed income ETFs

European ETFs in January 2019 Net Inflows (EURm)NNA tripled to €7.6bn from €2.4bn Monthly NNA on European ETFs

Decent start to a year for European ETFs Cumulated monthly NNA on European ETFs

Best start ever for emerging market equities Cumulated monthly NNA on emerging market equity ETFs

Commodity ETFs started 2019 as they closed 2018, in the red Cumulated monthly NNA on commodity ETFs

0 1,000 2,000 3,000 4,000 5,000 9,0008,0006,000 7,000

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Dec-2018

Nov-2018

Jan-2019

Mar-2018

Apr-2018

Fev-2018 7,870

1,332

6711,152

794

4,258

2,293

5,849

753

4,037

2,375

7,587 2016 2017 2018 2019

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec-10,000

10,000

20,000

30,000

40,000

50,000

60,000

70,000 2016 2017 2018 2019

0

5,000

10,000

15,000

20,000

25,000

30,000


2016 2017 2018 2019

4,000

6,000

8,000

10,000

-2,000

2,000

0


2016 2017 2018 2019


2016 2017 2018 2019

3,000

3,500

2,500

2,000

-1,000

-500

1,500

1,000

500

0




Fixed IncomeBest month ever for fixed income ETFs (€6.2bn) Monthly NNA on fixed income ETFs

CommoditiesCommodity ETFs continue to suffer outflows Monthly NNA on commodity ETFs

EquityEquity ETF flows rebounded Monthly NNA on equity ETFs

EM equity ETFs outdo developed peers Monthly NNA on developed vs. emerging markets equity ETFs

DM bonds outdo EM peers again Monthly NNA on developed vs. emerging markets fixed income ETFs

...mainly due to broad commodity ETFs Monthly NNA on broad & precious metals ETFs

0

-2,000

-1,000

1,000

2,000

3,000

5,000

4,000

6,000

7,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-200

-400

-600

-800

-1,000

0

200

400

800

600

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000 Developed Market Emerging Market

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-1,000

0

800

600

400

200

-600

-800

-200

-400

1,000 Broad Commodities Precious Metals

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-1,000

0

1,000

2,000

3,000

4,000 Developed Market Emerging Market

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

Overview by asset class


0

-2,000

-1,000

6,000

2,000

3,000

4,000

1,000

7,000

5,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019



Negative trend for Spanish and Italian equities Monthly NNA on peripheral Europe equity ETFs

Eurozone equity ETFs flows decline sharply Monthly NNA on Eurozone equity ETFs

European EquitiesAnother poor month for European equity ETFs Monthly NNA on European equity ETFs

German equity ETFs flows turn for the worse Monthly NNA on German equity ETFs

Developed Europe equities flows collapse again Monthly NNA on developed Europe region equity ETFs

Outflows from financials ETFs accelerate Monthly NNA on financials Europe equity ETFs

Equities


-5,000

-2,000

-3,000

-1,000

0

-4,000

1,000

2,000

3,000

4,000

5,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-100

-200

-300

-500

-400

0

100

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-600

-400

-200

0

400

200

800

600

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

4,000

2,000

1,000

3,000

0

-2,000

-1,000

-3,000

-4,000Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

0

500

-500

1,000

-1,000

-1,500

1,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

0

500

-500

-1,000

-1,500

-2,000

1,000

-2,500

-3,000

1,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019



A second strong month for emerging markets equities Monthly NNA on emerging market equity ETFs

Smart beta ETFs flows turn largely positive Monthly NNA on smart beta ETFs

US & Japan equities

Emerging market equities

Smart Beta / Value

US equity ETFs suffer more outflows Monthly NNA on US equity ETFs

Japan equity ETFs flows rebound Monthly NNA on Japan equity ETFs

Broad EM equities enjoyed another strong month Monthly NNA on broad EM equity ETFs

Little to no interest in Value Monthly net new assets on value style equity ETFs

Equities (cont’d)


-3,000

-1,000

-2,000

0

1,000

2,000

3,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

0

1,000

-1,000

-2,000

2,000

3,000

4,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

0

500

1,000

-500

-1,000

2,000

1,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-500

0

500

1,000

-1,000

-1,500

-2,000

1,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-1,500

500

0

-1,000

-500

1,000

2,000

1,500

2,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

400

200

-200

-400

-600

-800

0

-1,000Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019



Inflation-linked bond flows turn positive Monthly NNA on inflation-linked bonds ETFs

IG bonds outdo HY peers Monthly NNA on investment grade & high yield bond ETFs

European Govies US Govies

Inflation Linked EM debt

Credit Market Short-bond strategy

EU government bond ETFs continue to enjoy massive inflows Monthly NNA on EU government bond ETFs

8th consecutive positive month for US treasuries Monthly NNA on US government bond ETFs

Emerging debt ETFs flows strengthen sharply Monthly NNA on emerging market debt ETFs

Little interest in short bonds strategies Monthly NNA on short bond strategy ETFs

Fixed Income


-500

-300

-400

-200

-100

0

400

300

200

100

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

Investment Grade High Yields

0

-1,500

-1,000

-500

500

1,000

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-400

400

200

0

-200

600

1,000

800

1,200

-1,000

0

-500

500

1,500

2,000

1,000

3,000

2,500

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

-500

-300

-400

-200

-100

0

100

200

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

Feb-2018

Mar-2018

Apr-2018

May-2018

Jun-2018

Jul-2018

Aug-2018

Sep-2018

Oct-2018

Nov-2018

Dec-2018

Jan-2019

0

500

1,000

-500

-1,000

2,500

2,000

1,500



Contact [email protected] | +33 (0)1 42 13 59 56

Marlène Hassine KonquiHead of ETF Research+33 1 42 13 59 [email protected]

Kristo DurbakuETF Research Analyst+33 1 57 29 25 [email protected]

Check out theAlpha/Beta Allocator Q3 2018

Read more

Read the full 2017 analysison active and passiveperformance

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ETF Research Team

Analysing active & passive fund performance What 2017 results tell us about portfolio construction

FOR PROFESSIONAL AND QUALIFIED INVESTORS ONLYThis document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).

LYXOR ETF Research

mailto:[email protected]

mailto:[email protected]

https://www.lyxoretf.fr/pdfDocuments/Q3%20Alpha%20Beta%20Allocator%20FR_3b87abe8e5e708106f1424b6027d3008.pdf

http://www.lyxor.com/uploads/tx_bilyxornews/Lyxor_ETF_Active_Passive_2017_01.pdf



Important informationThis document is of a commercial nature and not of a regulatory nature. It is each investor’s responsibility to ascertain that it is authorised to subscribe, or invest into this product. Prior to investing in the product, investors should seek independent financial, tax, accounting and legal advice.

The indexes and the trademarks used in this document are the intellectual property of index sponsors and/or its licensors. The indexes are used under license from index sponsors. The Funds based on the indexes are in no way sponsored, endorsed, sold or promoted by index sponsors and/ or its licensors and neither index sponsors nor its licensors shall have any liability with respect thereto.

Lyxor UCITS ETFs referred on this document are open ended mutual investment funds (i) established under the French law and approved by the Autorité des Marchés Financiers (the French Financial Markets Authority) or (ii) established under Luxembourg law and approved by the Commission de Surveillance du Secteur Financier (the Luxembourg Financial Markets Authority) (CSSF) and authorized for marketing of their units or shares in various European countries (the Marketing Countries) pursuant to the article 93 of the 2009/65/EC Directive.

Société Générale, Lyxor AM and Lyxor Asset Management Luxembourg recommend that investors read carefully the “risk factors” section of the product’s prospectus and the “Risk and reward” section of the Key Investor Information Document (KIID). The prospectus in French for French Lyxor UCITS ETFs and in English for Luxembourg Lyxor UCITS ETFs and the KIID in the local languages of the Marketing Countries are available free of charge on www.lyxoretf.com or upon request to [email protected].

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The indices referred to herein (the “Index”) are not sponsored, approved or sold by Société Générale, Lyxor AM or Lyxor Asset Management Luxembourg. Société Générale, Lyxor AM and Lyxor Asset Management Luxembourg shall not assume any responsibility in this respect.

The accuracy, completeness or relevance of the information which has been drawn from external sources is not guaranteed although it is drawn from sources reasonably believed to be reliable. Subject to any applicable law, Société Générale, Lyxor AM and Lyxor Asset Management Luxembourg shall not assume any liability in this respect.

The market information displayed in this document is based on data at a given moment and may change from time to time.

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Société Générale is a French credit institution (bank) authorised by the Autorité de contrôle prudential et de résolution (the French Prudential Control Authority).

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© COPYRIGHT 2019 LYXOR INTERNATIONAL ASSET MANAGEMENT ALL RIGHTS RESERVED

Notice to UK Investors: This material is issued in the UK by Lyxor Asset Management UK LLP, which is authorized and regulated by the Financial Conduct Authority in the UK under registration number 435658.

Knowing your riskIt is important for potential investors to evaluate the risks described below and in the fund prospectus on our website www.lyxoretf.com

Capital at riskThe capital invested is not guaranteed.

Replication riskThe fund objectives might not be reached due to unexpected events on the underlying markets which will impact the index calculation and the efficient fund replication.

Fund liquidity riskThe fund’s liquidity and/or value may be negatively affected by different factors.

Counterparty riskThe fund may be exposed to the counterparty risk resulting from the use of otc forward financial instruments contracted with a lending institution, or from the use of a securities lending programme.

Currency riskThe funds are exposed to currency risk, as they may be denominated in a currency different from the index.

Ref

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