Exchange-traded funds (ETFs) continued to rise in popularity as the global investment outlook remains uncertain, with investors flooding into more defensive assets.
ETF provider Source has revealed European investors have increased their commodity exposure, with $1.3bn going into broad commodity ETFs in the first quarter of 2017.
Chris Mellor, product specialist at Source, said: “It’s clear that investors wanting to diversify their portfolios are turning to commodities.
“That makes sense given the low correlation commodities have with equities and bonds, and especially now that some equity valuations may look stretched.”
Assets invested in ETFs and exchange-traded products (ETPs) listed in Europe reached $620bn at the end of February 2017, surpassing the $599bn record set at the end of January this year, according to consultancy firm ETFGI.
February marked the 30th consecutive month of net inflows into ETFs and ETPs in a sign interest among investors in these low cost passive products is climbing.
Deborah Fuhr, managing partner and co-founder of ETFGI, warned: “There are significant upcoming political and economic events that investors will be watching in Europe in the next two months: the first round of the French election, a Dutch general election, the beginning of the UK’s Brexit negotiations and officials from the EU and the IMF are once again locked in negotiations over the Greek bailout.”
It confirmed at the end of February the European ETF/ETP industry had 2,233 ETFs/ETPs, with 7,025 listings, from 58 providers listed on 25 exchanges in 21 countries.
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