Exchange traded products (ETPs) have seen €41bn of net inflows over the last year, with particular demand for broad-based European funds, commodity and fixed income funds.

A new report by iShares, a provider of exchange traded funds (ETF), shows over assets under management for European ETPs now stand a €137bn, a 28 per cent increase in asset levels over the past 12 months. Trends in Asset Flows and Assets under Management is designed to inform investors of emerging trends within the ETP market, and provides an overview of broad market trends in European ETP asset gathering, across all product providers.

"This report shows demand for exchange traded products continues to grow particularly as investors look to transparent and highly liquid products with which to invest," commented Nizam Hamid, head of sales strategy at iShares Europe. "The key findings have been the strength of flows into regional products which reflects investors' demand for broader based indices, and increased flows into emerging market ETPs, which reveals their confidence in enhanced recovery prospects for emerging market economies."

Commodity products recorded inflows of €6.4bn, accounting for almost 16 per cent of total flows. 73 per cent of this went into precious metals, predominantly gold.

"Commodities, especially in the current year, have been an important area of investor interest and can, in part, be viewed as a continuation of the trend to invest in products that provide a hedge against inflationary pressure."

Meanwhile, fixed income funds also claimed 16 per cent of the new assets, the bulk of which went into corporate bonds and short-term government bonds. Money market ETFs felt this as a blow, with outflows of €1.1bn over the year.

"Fixed income funds - where there has been a flurry of product launches over the past 12 months - have also experienced significant positive inflows in the period, despite the outflows from money market related ETFs. This demand shows how investors value ETFs by helping to create a more balanced risk managed portfolio."

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