The Financial Times is reporting that European investor interest in exchange traded funds remains strong while mutual funds are experiencing record levels of redemptions.
According to the article, ETFs find favour with jittery investors, the ETF market in Europe has increased by 13 per cent this year to $145.17 billion and is expected to exceed $200 billion in 2009. European mutual funds saw redemptions total €124bn during September.
Fixed income ETFs are the most popular in Europe, with 27.3 per cent of the assets. ETFs covering European country indices make up 18.6 per cent of assets.
For US investors interested in European fixed income should look into the SPDR Lehman International Treasury Bond ETF (BWX) which is based on an index that tracks fixed-rate local currency sovereign debt of investment-grade countries outside the United States.
Another option is the SPDR DB International Government Inflation-Protected Bond ETF (WIP) which tracks an index that measures the performance of inflation-linked government bonds from both developed and emerging market countries outside of the United States.