Investments  

European ETFs attract cash despite uncertainty

European ETFs attract cash despite uncertainty

Record levels of money have poured into European exchange-traded products, despite investor sentiment being shaken by uncertainty over China and US Federal Reserve policy.

Latest data from specialist ETF consultancy ETFGI revealed that exchange-traded funds listed in Europe garnered US$61.6bn (£40.1bn) as at the end of the third quarter this year.

Considering the total net new assets raised in Europe for the whole of 2014 was US$61.8bn (£40.2bn) and the “rollercoaster ride for investors” during September 2015, the strong inflows suggest investors are looking for lower-cost ways to remain invested in the markets.

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Deborah Fuhr, managing partner for ETGI, said the strong inflows to the end of September 2013 marked the 12th consecutive month of positive net inflows.

There are headwinds, however. She said: “Uncertainty on China and when the Fed will raise interest rates continues to weigh the markets and investor sentiment.” The S&P 500 decreased 2.6 per cent over September, and is down 6.7 per cent over the year to date.

The European ETF/ETP industry had 2,145 ETPs, with 6,582 listings across various exchanges. Total assets under management were at US$480bn (£312.5bn), from 49 providers listed on 25 exchanges in 21 countries at the end of September 2015.

Fund name

LSE  code

ISIN

Dividend yield

TER (pa)

Number of Stocks

WisdomTree UK Equity Income UCITS ETF

WUKD

IE00BYPGTJ26

5.9%*

0.29%

103

* Dividend yields quoted are the trailing 12 months measure of dividend yields using the index level at 02/09/2015.

This comes as provider WisdomTree listed a UK Equity Income Ucits ETF on the London Stock Exchange.

Listed as WUKD, the fund aims to offer investors exposure to a subset of the UK’s highest dividend yielding stocks in a diversified basket of more than 100 constituent stocks.

It also avoids following traditional market-cap weighted indices, but instead tracks a dividend-weighted index.

The fund has a total expense ratio of 29 basis points.

Hector McNeil, co-chief executive of WisdomTree Europe, said: “Based on client demand for WisdomTree’s Equity Income methodology, this is the first ETF that WisdomTree Europe is launching dedicated to the UK market.”