BlackRock Global ETP Flows : Flows roar back, $62.1B was added to global ETPs in March, almost tripling the $23.3B added in February and taking Q1 global ETP net inflows to $148.5B.
Sign up to our free newsletters
BlackRock Global ETP Flows March 2023
Karim Chedid, EMEA Head of iShares Investment Strategy at BlackRock
Discussing the report, Karim Chedid, EMEA Head of iShares Investment Strategy at BlackRock, said, “While flows to ETPs increase across the board in March, there was a clear defensive shift in sector and commodity flows, including gold. March recorded the highest month for rates on record, as fixed income flows rose to $38 billion. In EMEA listed ETPs, the divergence between euro credit and USD credit continued, with investors continuing to favour the former.”
Global ETP Flows – March 2023
- Buying across the board: fixed income flows rose to $38.0B – the highest since October 2022 – and equity flows jumped from $9.4B in February to $24.3B in March.
- A defensive tilt: commodity flows increased to $1.7B, the largest inflow month since April 2022, driven entirely by gold buying, while sector flows also showed a defensive tilt.
Rising across regions
The increase in equity buying came across regions. US equity flows returned to positive territory for the first time since December, with $6.3B added. Global EM equity flows increased to $6.6B, driven by single country buying ($5.0B) – predominantly in APAC-listed China and India ETPs, with the remaining $1.6B going into EMEA-listed ETPs.
On the other hand, inflows into European equities fell in March: the $1.6B added to the exposure marks the lowest inflow month in three. While US-listed inflows drove European equity buying in January and February, inflows in March were entirely into EMEA-listed ETPs. Our analysis in the past has highlighted that the international buying of European equity ETPs does not tend to be sticky money, but March’s flows reflect more of a plateau than an unwind for now.
Record rates
Defensive positioning came through in fixed income flows in March amid market volatility, with the largest monthly inflows into rates ETPs on record ($33.2B), beating the previous record set in May 2022. Of this, $28.6B went into US Treasury exposures, while $3.4B went into European rates exposures, including $2.5B into eurozone rates, $0.5B into German bunds, and $0.3B into UK gilt ETPs. Among the flows into European rates, more than $2.0B went into exposures with up to five years of duration.
Global credit flows showed mixed conviction: investment grade (IG) flows turned positive ($0.4B), while high yield (HY) outflows moderated – albeit remaining negative (- $1.3B). In EMEA-listed ETPs, the divergence between euro credit and USD credit continued, with $1.1B out of $IG vs. $0.3B into €IG, and similar trends in HY.
A defensive tilt
Selectivity continues to come through in sector flows, with a defensive tilt in March. Tech led the way, with $3.2B of inflows: $2.0B of this went into US tech – the largest inflow month for US tech since October 2022 and following three outflow months in the past four. On the other hand, healthcare flows remained negative, with $0.2B of outflows in March – the fourth consecutive month of selling – although this was skewed by outflows from US healthcare exposures.
Financials notching up a second consecutive month of inflows ($1.6B), while energy remained unpopular in March, with $1.8B of outflows – a fourth consecutive month of selling.
Defensive positioning also came through in commodity flows. Gold ETPs notched up their largest inflow month since April 2022, with $1.7B added, following a cumulative $25.5B of outflows since last April. Inflows came across listing regions, relatively evenly split between EMEA-listed and US-listed ETPs. Flows into other commodity exposures netted out.
Sustainable flows moderate
Sustainable ETPs registered $3.7B of outflows in March.
Flows into EMEA-listed ETPs decreased from $4.1B in February to $1.9B in March. Within EMEA, equity ETPs accounted for the majority of inflows ($1.5B), mainly into ESG optimised ($724m) and ESG tilt strategies ($652m). Fixed income flows in EMEA totalled $392m, down from a 12-month average of $1.7B. The majority of fixed income flows went into eurozone climate strategies ($180m). US and eurozone best-in-class strategies saw $417m and $169m of outflows, respectively.
US-listed sustainable ETPs saw net outflows (-$5.6B). Equity exposures registered $5.7B of selling, contrasting with inflows into fixed income ($128m). US ESG tilt strategies gathered $107m of inflows. Fixed income flows remained in line with their 12-month average, with US ESG optimised strategies seeing $117m of buying.
Source: ETFWorld.co.uk
Subscribe to Our Newsletter
