US investors have yanked almost $4bn out of Europe-focused ETFs over the past week, but the outflow has been cushioned by domestic European investors, according to Markit.
The data provider has some interesting charts showing the divergence of demand for European equities, as measured by buying of US-listed European-exposed ETFs (exchange-traded funds) and Europe-listed European ETFs, which have taken in $4.5bn over the past six months, FastFT reports.
In the report Markit analyst Simon Colvin wrote:“In a reversal to what had been one of the most interesting investment stories of the year so far, US investors have been actively trimming their exposure to European exposed funds after gorging on the asset class in the opening six months of the year.
“The possible causes for this capital flight may range from the fact that Europe stands to lose more from further Russian sanctions, anaemic European growth and the strengthening dollar,. The only certainty is that a growing portion of American investors think that their assets are better invested outside of Europe, something which wasn’t the case six weeks ago.”
Interestingly, US investors are least keen on “core” eurozone countries like Germany and France, and non-euro Sweden, while Italy and Spain ETFs in the US have enjoyed net inflows over the past three month
