Global ETP flows totalled $39.6 billion in July, bringing year-to-date (YTD) flows to $371.5bn, just shy of the $378.7bn recorded for all of last year, according to BlackRock’s latest ETP Landscape report. Equity ETPs led net inflows for the month with $25.8bn, reaching a new full-year high with $257.8bn YTD.
Year-to-date, global ETP flows totalled $371.5bn, just shy of the $378.7bn recorded for all of 2016.
During July, non-US equity flows of $17.2bn outpaced US equity flows globally for the seventh consecutive month and were evenly distributed across broad Europe, Japan, EAFE, broad emerging markets (EM) and global exposures. Broad Europe equity had inflows of $4.0bn and has now generated at least this much in each of the past five months.
Patrick Mattar, from the iShares EMEA capital markets team at BlackRock, commented: “July was yet another strong month for European equities. The $3.7bn that went into EMEA-listed ETFs mean there have now been eleven consecutive months of European equity ETP inflows – the longest inflow run on record.”
Broad EM equity flows reached $3.3bn globally, and the $28.5bn year-to-date is closing in on the annual record set in 2010. EAFE equity flows, which have averaged over $5bn during the past eight months, remained steady at $3.3bn.
Overall fixed income flows were $13.7bn and have steadily reached $101.5bn YTD, within striking distance of the record $115.7bn for full-year 2016 with BlackRock attributing the strong, consistent growth for the asset class to the secular trend of increased ETP adoption. Flows were led by investment grade corporate ETPs, which gathered $4.8bn to push YTD flows to $35.4bn, topping the annual record set in 2016.
Mattar said: “Investment grade (IG) credit has been an area of focus in fixed income ETPs globally this year. EMEA-listed $IG ETPs are on a run of seven straight inflow months and €IG ETPs now have three straight months of inflows since the French presidential election.”
Elsewhere, high yield corporate ETPs rebounded to $2.7bn, the best since December, after two straight months of outflows, and EM debt flows, which have set a record this year, slowed to $0.6bn after averaging $2.5bn per month in Q2. This trend was particularly pronounced in Europe as EMEA-listed EM debt funds had their weakest month of the year in July, attracting just $0.7bn. This was the first month of the year where inflows have been less than $1.0bn.
Mattar commented: “EM debt strength has been a key theme this year but recent performance means some investors appear to be cooling their interest in the asset class. Despite this, EM debt was yet again the strongest category in fixed income flows, showing that on a relative basis investors are continuing to allocate to the asset class at scale.”
Commodity ETPs shed $2.7bn, the most since December, including outflows for both gold and crude oil, although differences in regional appetites remained clear. “We have previously highlighted that US and EMEA investors appear to have had opposing views on gold this year,” Mattar said. “In July, the pattern of the US selling coinciding with Europe buying (and vice versa) was even more pronounced. In four out of seven months this year there have been net outflows from US-listed gold ETPs, while EMEA-listed equivalents have attracted consistent inflows.”