Investors pulled billions of dollars from European synthetic exchange-traded funds in October, while physically-backed equivalents staged a sharp recovery, suggesting that recent criticism of them is starting to take its toll.

According to a report by analysts at asset management group BlackRock, synthetics suffered outflows totalling $7.3bn in the three months to October and physicals enjoyed inflows totalling $6bn. In contrast, in the three months to October 2010, synthetic gains of $7.7bn were equal to the $7.7bn gathered by physicals.