Investors pulled money from European equity exchange traded funds in August at the fastest pace since the 2016 Brexit referendum as fears of recession mounted.
The $7.7bn withdrawn from the sector was the sixth straight month of net outflows, and second only to the $8.9bn of net selling recorded in July 2016, according to data from BlackRock, reflecting the darkening sentiment across the continent.
Amid war and surging inflation, investors were being spooked by “a deepening energy crisis”, said Karim Chedid, head of investment strategy for BlackRock’s iShares arm in the Emea region. This was allied to “hawkish repricing” of European Central Bank policy “throughout August, especially at the front end [of the curve],” he added, with markets now pricing in a 50 per cent likelihood of a 75 basis point rate rise, rather than 50bp, at the bank’s coming meeting on September 8.