EMEA-listed ETPs recorded $2.3 billion in net inflows during May, the lowest inflow month of the year so far, according to a report by BlackRock, the asset manager behind the iShares range of ETFs.
US equity ETPs (EMEA listed) recorded their largest monthly inflows since October 2018.
Equities
Equity ETPs gathered $1bn in May led by US equity ETPs which added $1.6bn, the largest monthly inflow since October 2018. This represented a reversal of demand for the segment following $0.3bn in outflows during April.
According to BlackRock, EMEA investors have appeared to lack conviction on US equities over the course of 2019.
The segment has been characterized by two inflow months and two outflow months prior to May, taking year-to-date net inflows to $1.3bn. This mixed picture started to appear in December 2018, following 19 consecutive months of inflows.
Investors continued to sell European equities for a fourth consecutive month with $0.9bn in net outflows during May, albeit this figure is notably smaller than the $2.8bn withdrawn per month in both March and April.
Emerging market equity ETPs shed $0.3bn in May in the first outflow month since August 2018.
Fixed income
Flows into fixed income ETPs dropped to just $715 million, a significant reduction from the $4.7bn inflows recorded by the asset class in April.
Emerging market debt (EMD) fell significantly out of favour with ETPs covering this space experiencing net outflows of $1.7bn. This marked the largest outflow month from EMD since November 2016 and the first outflow month since August 2018 during the EM currency crises.
The majority ($1.5bn) of the EMD outflows can be attributed to local currency EMD ETPs which were sold for five consecutive weeks following consistent buying up until mid-April. Hard currency EMD flows were more mixed.
Interest in rates ETPs picked up following a lacklustre April with $1.4bn added in May. Buying in investment grade exposures more than halved from April to $0.7bn in May, while investors sold high yield for the first time this year, withdrawing a net $0.6bn during the month.
Commodities
Commodity ETPs gathered $440m, the largest inflow for the asset class since January.
Gold ETPs gathered $0.8bn in May, following $300m outflows the month before. Despite increased market volatility this year, there hasn’t been a significant flock to safe-haven exposures such as gold. BlackRock notes this situation is similar to that which occurred during the volatility episode in February 2018 where $1bn flowed out of gold ETPs. On the other hand, the firm believes that spikes in gold ETP inflows in December – which came amid broad risk-off sentiment – does point to some safe-haven demand.