September was historic for the UCITS ETF market in several respects. Never before has so much capital flowed into ETFs*, never before have investors invested so much in equity ETFs. The biggest beneficiaries were ETFs on the USA, emerging markets, and commodities, especially gold ETFs. “After a somewhat quieter summer break, the ETF markets are making a spectacular comeback. Driven by falling US interest rates, investors are clearly in risk-on mode and are shifting from bond to equity ETFs,” says Stefan Kuhn, Head of ETF & Index Distribution, Europe at Fidelity International. Bond ETFs were the losers, although this category also recorded inflows.

“All in all, this development once again underlines the attractiveness of ETFs as an investment vehicle. The democratization of capital markets continues. If positive impulses from the macro side are added, records like those in September are possible,” says Kuhn.

Market Event of the Month: Semi-Transparent ETFs Available in Europe for the First Time Recently, the Irish Central Bank allowed ETF providers to offer investors semi-transparent ETFs for the first time. This structure allows fundamental research to be integrated into ETFs while protecting their intellectual property, as they do not have to disclose the holdings of the respective products daily.

“What may seem counterintuitive at first can have many advantages for investors. Especially in inefficient capital markets, active research can really pay off. In order to offer this to customers, product providers must be able to handle the disclosure of their analyses more flexibly. The fact that this is now possible thanks to the regulator is good news for investors,” says Stefan Kuhn.