BlackRock Global ETP Flows : US equity remained the most popular regional equity allocation, with a further $75.5B added in October, followed by emerging market (EM, $29.4B) and European equity ($0.5B).
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BlackRock Global ETP Flows October 2024
Karim Chedid, head of investment strategy for iShares EMEA at BlackRock
- Second-highest inflow month this year: ETP buying picked up to $187.8B in October from $160.9B in September.
- Broad-based buying: the increase in flows came across equities ($124.6B), fixed income ($49.2B) and commodities ($6.4B).
- Cyclical comeback: investors tilted back into cyclicals, with industrials registering their largest inflow month since March 2021 ($2.4B) as better-than-expected growth data drove a repricing of rate expectations across markets.
Consistent allocation trends
US equity remained the most popular regional equity allocation, with a further $75.5B added in October, followed by emerging market (EM, $29.4B) and European equity ($0.5B).
Similar to last month’s dynamics, domestic buying accounted for the majority of US and European equity flow momentum, while EM equity flows were more split between US-listed ($12.5B) and APAC-listed exposures ($14.6B).
Flows into EMEA-listed European equity ETPs have supported broad European equity flows for nine months, with $1.2B of buying in EMEA in October offsetting a further $0.7B of outflows from US-listed exposures. Digging deeper, broad market exposure remained most popular in October, while mid cap flows remained consistent with the prior month and small cap flows ($0.1B) returned to positive territory.
Flying high
Flows into fixed income ETPs broadly followed the trends seen across the summer and into September, with a pickup in rates flows the only significant shift in October. Rates flows rose to $15.8B, almost double the $8.0B added in September, while investment grade (IG, $7.1B) and high yield (HY, $2.4B) credit flows remained consistent.
For the first time since April, EMEA-listed HY flows ($2.1B) outpaced US-listed HY ($0.2B) – with the latter falling to its lowest monthly inflow level since April. The $2.1B added to EMEA-listed HY ETPs marked the second-highest inflow month on record, just short of the $2.2B added in June 2020; in contrast to June 2020, October inflows favoured EUR over USD exposures (USD HY made up 9.5% of flows in October versus 50% of HY flows in June 2020).
A cyclical reset
The resumption of cyclically-tilted flows in October suggests that September’s drop in buying may have been an outlier rather than the start of a long-term trend. Looking beyond tech – which resumed its sector flow leadership in October, with $7.0B added – industrials ($2.4B) notched up the highest inflow month since July 2021, while financials flows flipped back into positive territory ($0.9B), and mid cap flows ($4.0B) rose to the highest level since July 2023. Small cap flows slowed MoM but remained positive at $0.8B, while healthcare flipped back into negative territory for the second time in three months (-$0.6B), unwinding September’s $0.5B of net buying. While energy was an outlier from the cyclical trend, the sector has been out of favour given OPEC+ oversupply as well as insufficient demand drive.
With focus on US sector positioning in the run up to November’s election, US exposures drove the uptick in industrials flows in October. US small caps bucked the global small cap trend, with their first MoM increase in flows since July, while US mid caps notched up their highest inflow month since July 2023, with $3.8B of inflows.
Source: ETFWorld.co.uk
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