European ETF sector flows converge with performance in Week 39

European-listed ETFs and ETPs took net inflows in every major asset class but one in the week to September 25, according to Trackinsight data in ETF Express's weekly market wrap: equity products drew €2.83bn, fixed income €940.2m, commodities €363.1m and cryptocurrency €92.2m, while multi-asset products shed €67.9m. At sector level, flows and performance converged for the first time since August.

That ends the divergence this publication has tracked since August. In the €8.65bn week of September 1 a second straight split appeared, with the best-performing sector also the one being sold; a week later the tape itself was defensive and the flows followed it. Week 39 was when the sector line converged.

Information Technology led the sector performance table with a 4.57% gain and drew €275.7m; Health Care rose 1.73% and gathered €306.4m, second only to Consumer Discretionary's €427.6m, the largest sector inflow of the week. Utilities went the other way as both the worst performer, down 1.51%, and a seller's target at €137.1m out. Financials is the exception rather than the confirmation: €1.03bn left the sector in five days, more than twice the biggest sector inflow, and the wrap publishes no performance number against which to read it.

The geographic split was wider. World equity ETFs took €1.76bn and Developed Markets €1.43bn, the two largest geographic inflows, with Switzerland adding €292.1m; US-focused products gave back €280.5m, the largest geographic outflow, while Europe lost €257.7m and Taiwan €226.1m despite a 3.19% gain in the latter. South Korea's 5.80% return led the performance table, while Romania's 4.42% decline trailed it.

The same pattern held in theme funds, where money went to what worked and left what did not: Cybersecurity took €143.1m, Europe Defense €100.8m and Electrification €76.6m, while China Disruptive Technology lost €81.7m and Net Zero 2050 €70.4m. Cryptocurrency led theme performance at 6.50%, ahead of BioTech & Genomics at 5.33% and Robotics & Automation at 4.74%; Solar Energy was worst at minus 3.38%.

Fixed income followed the same defensive line: Corporate Investment Grade led with €675.4m, ahead of Government Investment Grade's €276.5m and Government Aggregate's €123.6m, while high yield lost money on both sides — €101.4m out of Government High Yield and €23.1m out of Corporate High Yield. Gold's €567.6m was the largest commodity move, larger on the wrap's own figures than the €363.1m commodities netted as a class, with the difference sitting in flows the wrap does not itemize; Multi Commodities shed €45.8m.

One aligned week does not erase a summer of divergence, but it makes the next financials print the one to watch. The €1.03bn that left in five days is the largest sector outflow in the wrap by a wide margin; a second week of selling would make it a rotation, and a quiet Week 40 would leave it as a trim.