BlackRock Global ETP Flows : Flows moderate: flows into global ETPs slowed to $65.3B in August, down from $90.1B in July, amid a drop in both equity and fixed income (FI) buying.
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BlackRock Global ETP Flows August 2023
Laura Cooper, Senior Investment Strategist of iShares EMEA at BlackRock
Cross-asset slowdown: equity flows fell to $45.7B in August from $60.5B in July, while FI buying waned to $22.3B from $32.1B previously. Commodity flows stayed in negative territory (-$3.2B).
Rates pickup: rates buying drove the majority of flows into fixed income ETPs in August, with $18.5B added, notching up the exposure’s largest inflow month since March this year ($35.2B).
Rates rule August
Rates drove 83% of fixed income ETP buying in August, with $18.5B added, up from the three-month average of 46% from May to July. As usual, US exposures led the way ($15.3B). Digging deeper into US rates flows, August saw a notable slowdown in duration buying: allocations shifted sharply in favour of short-term tenors, with $7.6B added – nearly 4x July levels. Bund buying has also been in favour through the summer: August ($0.8B) saw the highest inflows since March 2020, adding to July’s net buy of $0.5B.
Beyond developed markets (DM), emerging market (EM) debt ETPs registered $0.3B of net outflows after four months of inflows from April to July ($7.3B).
Elsewhere in fixed income, August saw strong selling pressure, with high yield credit (-$1.6B) and inflation -linked bonds (-$1.9B) in the red, and flat flows into investment grade (IG) credit. Yet these flows have merely dented strong credit buying this year, with $30.5B added to IG exposures from January to July.
Defensive sectors lead the way
August sector flows showed a defensive tilt, led by tech and healthcare. Tech drove inflows over the summer, with $17.2B added from May to July and a further $12.2B in August. With a cumulative $33B of inflows YTD, tech sector flows have already surpassed the $26B added over 2022 – putting the sector on track to be the most popular for the fifth year running. Healthcare buying also returned in August ($1.8B). Cyclical flows continued to shift in August. Financials outflows (-$3.3B) more than reversed July’s inflows ($2.4B), suggesting it may be too soon to call a turn in sentiment.
Source: ETFWorld.co.uk
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