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“The European ETF market is set for a record year” claims LGIM’s Howie Li

Howie Li (pictured), Head of ETFs at Legal & General Investment Management (LGIM) discusses the outlook for the European ETF market in H2 of 2021

“The European ETF market is set for a record year, with net flows hitting nearly $110bn so far in 2021 (versus $120bn over the full year in 2020). Equity ETFs have accounted for 80% of total net flows and in the Thematic space we are seeing another bumper year, with net flows of over $10bn already.

The Thematic ETF market has grown from $15bn at the end of H1 2020 to $41bn over the last year and the market has also evolved over this period, with many investors adopting Global thematic exposure as part of a changing approach to asset allocation, moving on from traditional regional building blocks.

The consideration of ESG impacts is also becoming more important to investors in Europe who invest in long-term themes. So far this year nearly 60% of Thematic ETF net flows have gone into ETFs that have received Article 8 or 9 classification under the EU Sustainable Finance Disclosure Regulation. Investors are increasingly seeking investment strategies that provide exposure to companies driving the growth towards a cleaner and greener economy globally, as well those companies that have a positive social impact, like those reducing inequalities in healthcare systems worldwide.”

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