The European ETF industry must be in a good mood currently, as October 2024 marked a new record for monthly inflows, with €28.5 billion ($30.2 billion) flowing into ETFs.

These inflows drove the estimated year-to-date net flows up to nearly €196 billion (approximately $208 billion), which would mark a new record for estimated full year inflows. That said, the strong inflows over the course of October brought my expectations for the estimated full year net flows up to a range between €210 billion and €230 billion ($223 billion and $244 billion).

Since equities were the best-selling asset type for the month, it is no surprise that equity classifications were dominating the table of the 10 best-selling classifications for the month. Within this positive environment the inflows in ETFs classified as equity U.S. marked a new all-time high for estimated monthly net flows at €9.6 billion ($10.2 billion).

These strong inflows might be caused by the so-called "Trump-trade" or the anticipation of possibly further decreasing interest rates in the U.S..

Equity Global was the second best-selling classification overall at €6.9 billion ($7.3 billion) in inflows, followed by Equity Emerging Markets Global at €1.1 billion (approximately $1.2 billion), as fifth best-selling classification overall, Equity U.S. Small & Mid Cap as number six with €1 billion ($1.06 billion) and Equity China as eighth best-selling classification with €900 million ($954 million).

Euro Investors Buying Into High-Yield Bonds

These estimated net inflows are helping the three largest Lipper classifications by assets under management (AUM) to maintain their current positions on the league table.

A more interesting story can be found with regard to the third-best-selling classification, Bond EUR High Yield, with €1.6 billion (approximately $1.7 billion) in inflows, as it appears European investors have sold the exposure they built last month in Bond EUR Corporates—posting a €1.2 billion ($1.27 billion) outflow—as well as some of their exposure to Bond USD Corporates—which saw €300 million ($318 million) in outflows—to buy into European high-yield bonds. This could be seen as kind of a risk-on move by European investors.

In addition, it looks like European investors still want to take profit from the further inverted yield curves, as Money Market EUR welcomed €1.5 billion (nearly $1.6 billion), the fourth-best-selling classification for the month, and Bond EMU Government Short Term added €600 million ($636 million).

Another way to interpret these inflows in the direction of the short end of the yield curve can be to see these flows as part of a possible portfolio trim, since Bond EMU Government Long Term added €900 million ($954 million) and Bond EMU Government added €800 million ($848 million) over the course of the month.