BlackRock Global ETP Flows : Monthly allocations to global ETPs fell to their lowest level since March 2020 in April, with just $27.4B of inflows, down from $117.4B in March.
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Global ETP Flows April 2022
While inflows dropped across asset classes, they fell most acutely in equities, where just $2.8B was added (down from $76.2B in March).
Fixed income flows fell slightly from $25.5B to $18.8B, while commodity flows tempered to $3.6B.
US outflows, but not an exodus
Outflows of -$25.6B from US equity ETPs – the largest monthly net sell on record for the exposure – dragged overall flows down in April, and came entirely out of US-listed ETPs (EMEA-listed peers saw $0.6B added). The US-listed outflows look to have been largely driven by a change in investment vehicle, with futures appearing cheaper to hold than the relevant ETP.
Investors also continued to sell European equity ETPs (-$2.5B), albeit at lower levels vs. March, with April outflows almost entirely from US-listed ETPs, with international investors starting to unwind. YTD flows into US-listed European equity ETPs have turned negative, following net outflows of -$3.5B over March and April.
While developed market (DM) regional flows struggled to gain momentum, emerging market (EM) flows were more consistent, with $11.7B added, up from $6.6B in March. Increased flows into single country exposures largely APAC-listed China ETPs – accounted for 57% of April’s EM flows, up from negative flows in March, driving the MoM figure higher.
Rates flows increase
In fixed income, rates flows ($15.9B) rose to the highest level since November 2018 and the second-highest on record, focused in US Treasuries. Short-term maturity flows ($7.5B) led in April, while long-term flows fell to $1.8B – in contrast to March, when the majority of flows went into longer-term maturities.
Flows into inflation linkers turned negative (-$0.3B), off the back of $1.9B of outflows in the last week of the month, unwinding some of the $4.0B added in March and marking a third outflow month in four for linkers.
Investors remain split on credit: HY outflows have persisted for four consecutive months, with -$3.5B out in April, again dominated by US HY – although EUR HY also sold off. In contrast, IG flows remained positive but fell to $1.2B, vs. $3.3B in March, due to reduced buying and -$0.7B of outflows from eurozone IG.
Turning defensive
Sector flows pointed to a more defensive tilt across equity allocations in April, with healthcare ($3.6B) leading the way, followed by utilities ($2.0B) in its third-highest monthly inflows on record. The sector has gathered $4.0B YTD, approaching its annual flow record of $4.4B set in 2014.
These trends were also reflected in factor flows: quality ($1.9B) remained most popular, while value (-$0.1B) turned negative for the first time since December 2021, and minimum volatility ($0.8B) saw its first inflow month in three.
Elsewhere, inflows into tech ($1.3B) continued at a slower pace vs. March, and materials flows ($1.6B) also persisted. April outflows of -$0.9B from industrials fully reversed the $0.5B added in March, while financials remained unloved (-$6.3B). YTD flows into financials stand at -$3.5B, completely unwinding the record allocations seen in February. However, investors have not fully sold out of the sector – 2021 net inflows of $46.2B have a long way yet to unwind.
Sustainable still under pressure
Sentiment towards sustainable ETPs remained under pressure in April, with inflows into EMEA- and US-listed exposures dropping to $4.41B. Europe gathered the lion’s share of inflows ($3.4B), while the US dropped to $1.1B – half the level seen in March.
Within European flows, global clean energy strategies ($260m) continued to dominate, followed closely by US exposures, including S&P Screened ($250m) and USA Optimised ($226m). Across sustainable strategies more generally, equity ESG Screened recorded the highest inflows for the month with $774m add, while equity best-in-class saw net outflows of -$404m. On the fixed income side, in contrast, inflows into best-in-class strategies ($6m) rose significantly on the month.
Delving deeper into US flows, on the equity side, the vast majority came from a single optimised strategy, with $765m added. As in Europe, US equity best-in-class strategies saw outflows (-$312m), while ESG screened equity exposures ($140m) registered inflows. In US fixed income ETPs, monthly flows also reflected European trends, with best-in-class strategies ($500m) leading the way. This was closely followed by ESG optimised fixed income, with inflows of $418m.
Source: ETFWorld.co.uk
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