From Morningstar:

The European exchange-traded funds (ETF) and exchange-traded commodities (ETC) markets saw record inflows in Q4 2023, with total assets closing the year at €1.64 trillion, a 9% increase from Q3 levels of €1.5 trillion. Equity ETFs picked up €89.7 billion of flows, making up the bulk of total inflows for the year.

Much of the Q4 rebound was due to buoyant equity markets and a rebound away from China markets into proxy markets providing indirect exposure to Asia’s biggest economy. European equities benefited from more optimistic sentiment for 2024 rate cuts, leading to inflows of €89.7 billion.

The US large cap blend equity category topped the quarterly flows league with €16.6 billion, while Japan Large-Cap Equity ETFs brought in around €2 billion by Q4, due to a corporate governance revolution and China’s fall from grace. China was shunned by investors in Q4, and the UK and Germany also experienced net outflows.

Money market ETFs saw inflows of €5.1 billion and fixed income products reported €57.2 billion in total inflows, with corporate bond ETFs bringing in €3.4 billion of flows in Q4 and “other bonds” category reporting €4.19 billion.

Categories such as USD Government Bonds Short Term and commodity ETCs suffered outflows of €0.54 billion and €4.9 billion, respectively. Investors pulled €9.2 billion out of commodity ETCs and ETFs in 2023, with overall assets for the products bleeding €4 billion by the end of the year. Gold products saw significant outflows, likely signaling a lack of interest from investors.



Read more: Exuberant Equity Markets Drive Record ETF Inflows