Global ETP flows fuelled by Japan equities in October

Nov 16th, 2018 | By | Category: ETF and Index News

ETPs collected $31.0 billion in net inflows globally during October, bolstered by robust demand for Japan equity ETPs which gathered $12.8bn, according to BlackRock’s latest ETP Landscape report.

Global ETP flows fuelled by Japan equities in October

Investors poured $12.8bn in net inflows into Japan equity ETPs during October amid solid corporate earnings and political stability in the country.

This marked the strongest month of inflows for Japan equity ETPs since March of this year.

BlackRock credits the healthy inflows to solid corporate earnings and political stability in the country as well as continuing purchases by the Bank of Japan.

In all, equity ETPs gathered $29.2bn in October. Aside from Japan, investors were particularly bullish on emerging markets and US equities with ETPs covering the two exposures pulling in $10.7bn and $4.3bn respectively.

Flows into emerging markets equity ETPs were led by Chinese equity funds which netted $7.4bn in flows against the backdrop of attractive valuations, economic reforms and continued earnings growth, according to BlackRock.

Year-to-date flows in emerging market ETPs have shifted toward single country exposures. A total of $42.6bn has flowed into emerging market equity ETPs thus far this year, consisting primarily of single country Asia Pacific equity ETPs ($29.6bn) while just $11.9bn has flowed into broad and regional funds. China leads the pack in this regard with $22.5bn, followed by South Korean equity ETPs with $6.9bn.

Within US equity ETPs, flows have slowed compared to prior months which BlackRock attributes to the effect of rising interest rates as well as equity market volatility. YTD flows, however, remain strong at $124.5bn, bolstered by solid corporate earnings and strong economic growth. Flows in October were driven by large-cap ETPs with $9.8bn which was mainly offset by net withdrawals from Financials and Real Estate sector funds which shed $2.5bn and $2.4bn in net outflows respectively.

European equity ETPs experienced net outflows of $1.1bn against the backdrop of relatively muted earnings growth, weak economic momentum and political risks. The outflows were driven by Broad EMU and Eurozone funds. Flows into European equity ETPs are also down $14.4bn YTD.

Flows into fixed income ETPs were mixed amid challenging US equity markets and rising interest rates. US Treasury fund flows remained strong, collecting $5.2bn, but were offset by outflows of $2.4bn from high yield and $2.7bn from US multi-sector bond funds. The asset class gathered just $0.3bn during October although YTD flows remain strong at $87.6bn.

Flows into gold ETPs were relatively flat during the month at $0.7bn.

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