Enthusiasm grows for emerging market ETFs

It was another strong quarter for Europe-domiciled ETFs, which attracted over $70bn in net inflows. Contrastingly, China and US regional ETFs suffered a large deceleration in flows from Q1. Equity ETF inflows were dominated by core beta ETFs, with thematic ETFs driven by investors’ clamour for defence investments. Fixed income ETF flows saw ultra-short products attract $7bn, followed by government bonds as investors sought diversification. Investors have turned to emerging market (EM) equities as a way of reducing risk. Despite tariff uncertainty, inflows into EM equity exposures rose by nearly...